Preamble

The House met at half-past Nine o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Orders of the Day — Consumer Guarantees Bill

Order for Second Reading read.

Mr. Dennis Skinner: On a point of order, Mr. Speaker. In view of the storms and the extensive damage throughout the country, I wonder whether you have had any indication that there will be a statement today, and whether the Minister will pay tribute to the ambulance men and women who have given devoted service alongside the firemen. As a result, will the Government allow the linkage payment to be made to the ambulance workers so that we can get this thing settled once and for all?

Mr. Speaker: I have had no indication yet of a statement but. I do not need to know that before 10 o'clock.

Mr. Martyr Jones: I beg to move, That the Bill be now read a Second time.
It is a privilege and a pleasure to move the Second Reading of the Consumer Guarantees Bill. I was not sure that I would be able to be here today as I came down with cook-chill disease yesterday and was laid up for most of the day. I hope to be able to make my entire speech, although I shall not delay the House too long.
The Bill is widely supported in the House and outside, and I hope that we can give it the wholehearted support that it deserves. The Bill falls into two distinct yet complementary parts. First, it takes an idea developed by the National Consumer Council for a consumer guarantee, which has been reformulated in the light of comments from business, industry, legal experts and, of course, the Department of Trade and Industry. The second part implements the Government's changes to the sale and supply of goods laws. I have incorporated those changes into the Bill at the request of the Under-Secretary of State for Industry and Consumer Affairs, who supplied me with the official draft from his Department.
The two parts of the Bill are complementary because they are both concerned with consumers. One part deals with their rights and the other with remedies. It is equally true that one part is concerned with prevention and the other with cure. Hon. Members who have read the National Consumer Council's report, "The Consumer Guarantee" will know that that part of the Bill is a natural and logical development from the part implementing new formulae for the sale and supply of goods laws. This morning I shall talk principally about the consumer guarantee. That does not mean that the rest of the Bill is

less important, but simply that more needs to be said about the consumer guarantee for reasons that will become apparent—if they are not already. The second part of the Bill should be uncontentious.
First, I pay tribute to the National Consumer Council and its staff for what can only be described as an excellent job. Many people have been involved in the project, but I should like to single out Baroness Oppenheim-Barnes who was the driving force behind the idea. Her major contribution to the Bill emphasises that it is not a party political issue. I know that hon. Members from both sides of the House will support the Bill today, as their constituents would want them to do. In so doing they will reassert the sovereignty of Parliament and emphasise our role representing the interests of those who send us here. I believe, as someone who worked in quality control in industry for 19 years, that the Bill will be good not only for consumers but for British business.
The objectives of the Bill are to secure full competition in the high street, to provide consumers with a clear arid simple statement of their rights and redress and to promote high standards of quality control. It will do so by defining a clear and simple guarantee, backed by legislation. That will allow consumers to choose a product by reference to its quality, reliability and after-sales service, not simply by its price. Businesses will not be required to give such guarantees, but producers of motor vehicles and major household appliances will be obliged to state whether they offer that protection. Consumers will be aware which manufacturers are prepared to stand by their products, and that will force manufacturers diligently to address the issue of product quality and customer service. As will be clear, the Bill will ensure that the benefits of legal protection and competition are harnessed to serve consumers and business.
The emphasis on the role of competition has caused some controversy. Many people have argued that the consumer guarantee should offer a minimum right. I have some sympathy with that view, but I have been persuaded that the National Consumer Council's approach to industry—"this is your last chance"—is right.
Yesterday, I received a letter from Sir Gordon Borrie, the Director General of Fair Trading. He welcomes the approach that the Bill takes and wishes it success today. However, he has a number of detailed reservations which he hopes the House will consider. They are important, because Sir Gordon is not only an eminent lawyer but the guardian of competition and fair trading. He says:
My basic worry arises from the attempt to proceed on a `voluntary' basis.
That bold truth comes from the man behind many codes of practice and other examples of self-regulation, which many hon. Members believe leave much to be desired. He further says that the voluntary scheme could increase confusion. The solution that he advocates is that the consumer guarantee should be developed into a statutory mandatory right. Many hon. Members will treat Sir Gordon's advice with the respect that it warrants: his views can be adopted through amendments made in Committee, should the Committee agree.
The House will want to know that I have received advice from other lawyers expert in this sector and in the intricacies of law reform. In the light of the few detailed concerns that they have expressed, I shall recommend three specific amendments in Committee to ensure that the regime is legally sound and has the endorsement of the


most eminent lawyers in the land. The first detailed point that they make is about the burden of proof on the existence of the defect. That was the last point of the Confederation of British Industry when it made six criticisms of the original consumer guarantee report. Five of those criticisms were taken up by the National Consumer Council, and I intend to take up the last one if the Bill is given a Second Reading.
The second point that lawyers made was the right of the consumer to notify the retailer of a claim against the guarantor. I shall drop that point to avoid the confusion that the Minister apparently fears. The third is the risk that a business man might be able to recover financial losses, say from a lost contract, due to a defect in a car. I am sure that the House will agree that those matters should be carefully considered.
I do not want to bore hon. Members with the detailed principles of something which I am sure they support, but I shall deal with some of the points that the Under-Secretary of State for Industry and Consumer Affairs may make. First, in the Todaynewspaper on 22 January, the Minister said that he is not aware of support for these measures. I find that odd, and I ask the Minister to listen to my hon. Friends today and to remember an Adjournment debate in December initiated by the hon. Member for Waveney (Mr. Porter). Secondly, I refer the Minister to his written answer of 22 January, which clearly mentions bodies that support these measures. Thirdly, I refer him to the results of a MORI poll, of which he and the Department have been informed, showing that 87 per cent. of people think that the guarantee is important and that 96 per cent. of voters want their Members of Parliament to support the Bill.
Fourthly, I refer the Minister to editorials in Today, the Daily Express, the Sunday Express, The Guardian, the Western Daily Press and the Newcastle Journal, not to mention other regional papers for East Anglia, Wales and many other parts of the country.
Fifthly, I ask the Minister to pay attention to views expressed by hon. Members and their constituents which have been forwarded to him and to which he has replied. Sixthly, I refer him to about 100 written responses that the National Consumer Council has given to his Department, showing support from consumer groups, manufacturers—including Hotpoint and Volvo—and retailers such as Comet, Argos, the Co-op, and the Retail Consortium.
I suspect that the Minister may select aspects of various responses to show some opposition to the Bill. The Consumers Association is delighted that it incorporates the Law Commission's amendments to the Sale of Goods Act 1979, and I am sure that that eminent body is equally satisfied with the changes that the Bill makes to the National Consumer Council's report.
I gather that the CBI still has some reservations about the Bill. No hon. Member would expect it to call for legislation to protect the consumer, but it would be a matter of considerable concern if it opposed a measure aimed at securing full competition, especially as all its detailed objections have now been met. Like most individuals, I should like to know what it believes should happen if I am sold a car or washing machine that turns out to be a lemon. If it believes that the seller rather than

the manufacturer of a defective product should be liable, let it so persuade the House by moving amendments to part V of the Bill.
I understand that the Minister thinks that the guarantee may be a burden on business. I find that a strange argument, because no business will have to offer the guarantee: only certain manufacturers will have to state whether they offer it. It is not a burden but an incentive to compete in quality.
The Minister is reported as saying that the Bill is unnecessary. I refer him once again to Sir Gordon Borrie's letter, which could not be clearer. He says:
There is undoubtedly a need for greater clarity and transparency about the rights of consumers faced with defective products.
I refer the Minister to a 1986 report, "Consumer Dissatisfaction", for which one of his senior officials at the Department of Trade and Industry was responsible when he was at the Office of Fair Trading. It shows that each year 14 million people are dissatisfied with products that they buy; that only half will have their problems resolved; and that over £5 billion is spent each year on products that turn out to be unsatisfactory. That is an appalling indictment of our industry.
I beseech the Minister to listen to the views of experts, colleagues, advisers, constituents, Baroness OppenheimBarnes—it matters not who—because anyone with eyes, ears and a modicum of intelligence can see that this is a necessary change in the law.

Mr. Peter Viggers: I am listening carefully to the hon. Gentleman's case. Concern has been expressed about the Bill, especially about its breadth of application. Much of the earlier discussion was on the Bill applying to cars and "brown" goods, but not necessarily to "white" goods or television sets. Manufacturers of those items believe that they offer satisfactory guarantees. If the Bill progresses, will he be prepared to consider a list of products to which it will apply, with a view perhaps to restricting the Bill if it can be shown that the manufacturers of those products have satisfactory guarantee arrangements?

Mr. Jones: I should be delighted to consider in Committee a list of specified products and I am sure that a list could be drawn up to answer the hon. Gentleman's criticisms but with the aims and principles of the Bill in mind.
The Minister is also reported as having criticised the measure on the grounds that it is bureaucratic. At first, I wondered whether the report was accurate, but the same word was used in The Times and the Sunday Telegraph.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth): It must be accurate then.

Mr. Jones: I want to put it on record that the Minister agrees that the wording in The Times and the Sunday Telegraph is accurate.
I have looked hard for bureaucracy in the Bill and I am forced to conclude that the Minister has either been criticising a different measure or believes that the disclosure of information on which the consumer choice must be exercised is in itself bureaucratic. If the latter is the case, I reassure him that, with his blessing and support, I


know that the House will drop that so-called bureaucracy and make the guarantee mandatory, as Sir Gordon Borne recommends.
I understand that the Minister has also said that the Bill is over-prescriptive. It is hard to imagine a milder medicine for this widespread malady. Anything that is simple and equitable, such as the consumer guarantee, must be prescribed. If the public are to have any confidence in the scheme, it should be set out in legislation. Business men themselves see merit in such detail being prescribed in legislation.
The Minister and his colleagues keep saying that it is not for Government to tell business how to run itself. But that must cut both ways. We are talking about the well-being of our industry and the quality of life of our citizens. Surely on such issues, unbridled ideology is inappropriate. We should listen to people who know and work together for the public good.
The public deserve the Bill now and business must have it if its quality control is to be sharpened up in time for 1992. I commend the Bill to the House.

Mr. Conal Gregory: I praise the initiative of the hon. Member for Clwyd, South-West (Mr. Jones) in choosing an extension of consumer rights as the subject of his private Member's Bill. As the House knows, I have a long standing interest in consumer matters and I chose consumer safety as the subject of my private Member's Bill in 1986. I believe that the hon. Member for Clwyd, South-West came first in the ballot whereas I came 20th on that occasion. Despite all the frustrations and difficulties that I understand the hon. Gentleman has already experienced, and the frustrations and difficulties that I predict he will have in future, I urge him to stick to his guns. If I can come in 20th in the ballot and find my Bill on the statute book, there is every reason for him to hope that his Bill, too, will become law.
The case for legislation is overwhelming. An enormous amount of confusion exists over a multitude of guarantees and warranties. It is essential that when a prospective purchaser looks at goods, he is aware whether there is a guarantee and, if there is, of his rights under it. We in Britain throw away £3,500 million on unsatisfactory cars and a further £346 million on faulty household goods.
Many hon. Members will remember the case of Mr. Bernstein a couple of years ago. Only a minority of cars is purchased by private consumers, but the brand-new car that Mr. Bernstein purchased was not a fleet car. He took the car away and the engine seized up after only 140 miles. He took the car back to the garage where more than 100 faults were identified. Much to my surprise, and no doubt to the surprise of many of our constituents, the High Court ruled against him on the ground that he should have taken adequate care and made adequate inquiry on the forecourt before taking the car away. That makes nonsense of consumer rights and guarantees. I feel for the Mr. Bernsteins of this world. The Bill would outlaw such practices.
Shoddy goods will disappear from our stores only when retailers and manufacturers realise that they have a duty to act responsibly. It is all too easy to lose the guarantee card for a new cooker, mowing machine or car and hope that

all will be well but then find that the small print and the lack of responsiveness are in stark contrast to the early charms of the sales person in closing the sale.
The Bill aims to cut through the red tape. There are two choices—a solid guarantee to compensate or replace the goods or a clear label stating that the product carries "no consumer guarantee". It is right to require free repairs, including labour costs and the loan of an article to perform the same functions, or compensation, in the meantime. The compensation that the hon. Member for Clwyd South-West suggests is extremely modest. I should have liked him to suggest not the value of the goods but one and a half times or double their value. That could have been whittled down in Committee, no doubt under pressure from the Minister. The hon. Gentleman has instead chosen a modest clause, which I hope he will not allow to be rescinded.
The surprise is that this important Bill falls in private Member's time and is not part of the Government's programme. The Conservative party may not be at the height of its popularity, and a caring piece of legislation designed to protect Mr. and Mrs. Typical Shopper would do wonders for its image and for the Minister's prospects.
The promoter rightly referred to the initiative of the National Consumer Council whose report "The Consumer Guarantee" mirrors in many ways the "lemon" laws in the North American states. The report was welcomed by my trading standards body, North Yorkshire county council, whose diligent trading standards officer Gordon Gresty, is a first-class local government officer. Countless examples will be given in this debate and in Committee of the problems that consumers have had, especially with cars and white goods. The Bill has my overwhelming support and I commend it to the House.

Mr. Robin Squire: I apologise to the House—if it is not self-evident—that although I have a different ailment from the promoter of the Bill, my voice may not last out. No doubt my hon. Friends will be reassured by that.
I declare a long-standing interest. I first joined what was then Lombard Banking in 1968 and I was with that institution when I was elected in 1979. I have continued with an interest. Although the institution has not asked me to speak today, I am speaking with the knowledge of, and with the advantage of information from the Finance Houses Association of which Lombard North Central is a major part. I add my congratulations to the hon. Member for Clwyd, South-West (Mr. Jones). He will get used to us trotting out our own experiences. A few years ago I was fortunate enough to be able to introduce the Local Government (Access to Information) Act 1985. I can assure the hon. Gentleman that he will find it a rewarding experience and—whatever my inevitable reservations may be—I am sure that he will end up with legislation on the statute book, and I wish him well. I am grateful to the Finance Houses Association for its assistance. It submitted a detailed response to the National Consumer Council paper, "Competing in Quality", published in June last year. While endorsing the aims of the consumer guarantee, it suggested that the position of the finance houses had not been properly considered.
To be fair, in its final report the NCC acknonwledged that the position of finance houses had been the most


difficult matter that it had had to address and it attempted to answer some of the difficulties that had been outlined in the Finance Houses Association response. There remained some problems on which a further response was submitted to the NCC. Subject to their resolution, the Finance Houses Association has asked me to make it clear that it remains happy to support the proposals for a consumer guarantee.
Unfortunately, the Bill as drafted appears to be based on a number of misconceptions and fails adequately to accommodate arrangements involving a finance house. I shall be brief, but I hope that the House will understand if I explain the different types of agreement in a little detail so that the thrust of the Finance Houses Association's reservations can be understood.
First, let me refer to to the application of the Bill. Clause 15 attempts to set out definitions of the parties to which the Bill will apply. It will apply to loans. Credit agreeements have been given the Consumer Credit Act 1974, section 137 definition. As a result, the Bill will apply to loans regulated by the Consumer Credit Act and loans not regulated by it. Regulated loans fall into various categories, such as debtor-creditor, debtor-creditor—supplier, fixed sum and running account credit—I shall not bore the House with full details. The Bill also covers asset-based credit agreements which, again, can be regulated or unregulated. Hire purchase, conditional sale and credit sale are included under that heading.
Hiring agreements can be regulated or unregulated. Although the FHA was led to understand that the Bill was intended to apply only to individual consumers, the definition of "consumer" in clause 15 seems to go beyond that. Clause 3 says:
a specified product means one which is …
(ii) ordinarily supplied for private use or consumption",
which clouds the issue even more. What criteria will be used to judge whether a product is "ordinarily" for private use? It seems illogical to extend the guarantee to certain business users when it has already been agreed by Ministers that that will be taken out of the scope of the Consumer Credit Act 1974. We are told that legislation initiated in November 1987 by my noble Friend Lord Young, the former Secretary of State for Trade and Industry, is merely awaiting parliamentary time.
Clause 2 attempts to cover special provisions in relation to finance agreements. Clause 2(1) specifies that it will be applicable only to goods
supplied to a consumer under a credit agreement or a consumer hire agreement.
The clause appears to be intended to cover all the agreements that I have mentioned, athough in many cases that would be wholly inappropriate. Alternatively, as a result of the way in which the Bill is drafted, clause 2 might not apply at all to loans. "Supply" has been given the same meaning as in section 46 of the Consumer Protection Act 1987 and means, therefore,
selling, hiring out or lending the goods",
or
entering into a hire-purchase agreement to furnish the goods".
It may be arguable that under the definition of "supply", finance houses do not fall within the scope of clause 2. That definition of supply would apply unless
the context otherwise requires".

It may be necessary to consider the ordinary meaning of the word "supplied". Can it be said that goods are "supplied" under a loan contract? The central point is whether a loan contract constitutes supplying goods. The answer is by no means certain in law and clarification is essential. I argue that it would probably not be a supply of goods and, therefore, clause 2—which is an important clause—would apply only to hire purchase, contract hire and rental agreements.
Clause 2(2) stipulates that where a consumer claims a refund, the guarantor, acting as an agent for the consumer will pay
such amounts as would be necessary under … the Consumer Credit Act 1974 to discharge the consumer's indebtedness
to the finance house and repay to the consumer what he has already paid. There is a defect in the drafting, in that sections 94 to 96 of the Consumer Credit Act apply only to certain types of agreement. Various types of agreement would not be included, such as unregulated agreements and consumer hire agreements. Ironically, if the definition that I gave a moment ago on loans is correct, and only consumer hire agreements are included, broadly speaking, we are now excluding those agreements under sections 94 to 96. What agreements will be covered by the Bill? Other agreements that would not be included are those where the charges are calculated on a daily basis, running account agreements and regulated hire agreements.
Provision will have to be made for the calculation of the amount due to the finance house in those cases, which could form a substantial proportion of all the cases that will arise under the Bill—because I hope that it will become an Act. It may be agreed that the Consumer Credit Act 1974 rules could be made to apply to unregulated loans but, as there are no Consumer Credit Act rules for most of the categories that I have outlined, there is an obvious central flaw.
There is a particular difficulty with hire agreements. A refund based on the total rentals may not be sufficient to pay off the finance company. The rentals, especially in the case of motor cars, may have taken into consideration tax allowances and the residual value of the car. In that case, the recovery of the residual value may depend on a pre-existing obligation to resell the supplying dealer. In cases where both the manufacturer and the car to the supplier of goods offer a consumer guarantee, it is uncertain who will be liable to pay the consumer's indebtedness to the finance house. The assumption must be that they will be jointly and severally liable, but that has not been made clear in the Bill.
A small adjustment is needed in clause 2(2)b). The words "consumer credit agreement" are used, but the word "consumer" is wrong in that context. Clause 2(3) states that where a guarantor has satisfied his obligations under clause 2(2),
he shall be entitled to recover the product.
However, it should be remembered that where the agreement is a hire purchase or conditional sale agreement, the customer becomes the owner of the goods upon payment of the indebtedness, so there will have to be further provision to ensure that title to the goods rests in the guarantor. If the goods are provided under a loan agreement, the customer will already have title to them, so it will be necessary to provide for the transfer of the title.
At what point will title and risk in the goods pass to the guarantor? The FHA assumes that that will be when


payment in full is made by the guarantor, but it could be when delivery is made to the guarantor. That point requires clarification. Although, separately, most of these are small points; collectively, they highlight the fact that a substantial amount of clarification is needed if the legislation is to to be fully acceptable.
Various items, which arguably should be covered in the Bill, are missing. There are no provisions, for example, relating to the impact of the supply of replacement goods, although that would have a major effect on finance houses. If goods are provided on hire purchase, conditional sale or consumer hire, title to the replacement goods must be passed to the finance company. It will be necessary, again, to identify at what point that happens. New documentation will have to be completed if the agreement is a regulated agreement. That is an important point as there could be an onerous administrative burden if many guarantees were exercised.
In fairness to many hon. Members who are waiting to speak, I shall gloss over some of the fiscal aspects of the proposals, which are not covered fully and which need greater attention. I shall draw them to the promoter's attention in a separate letter. The Bill does not take account of the fact that a guarantor may be unaware of the existence of a finance agreement. Where the guarantor is the manufacturer, it is unlikely that he will be aware that the goods in question are subject to a finance agreement. The FHA does not believe that it will always be possible to rely on the customer giving that information.
Clause 13 gives the Secretary of State excessive powers, it may be argued, to make regulations. My hon. Friend the Minister, who is well known for his sterling upholding of Conservative qualities on law and order and the importance of punitive action, must recognise that clause 13(1)(o) and (p) offer what may be unnecessary and undesirable powers to create new criminal offences. I realise that I may be attracting my hon. Friend to the Bill by highlighting that point, and I know that he will examine it closely.
Part V puts forward several important amendments to the Sale of Goods Act 1979, many of which deal with commercial rather than consumer sales. Perhaps the short title to the Bill should be "Consumer Guarantees and Sale of Goods (Amendment) Bill." The Bill raises important matters, that, are inevitably legalistic, and I apologise to the House for being rather dryer than most hon. Members will be. However, a substantial proportion of the sales of the goods that the promoter intends the Bill to cover are achieved by means of loan, hire purchase or other forms of agreement. In 1988 alone, the value of store goods supplied on credit was £2·794 billion, which is a staggering figure. It is important that we get this right. The Bill is important and I support it, with reservations. I wish the promoter well and I very much hope that the provisions about which I have reservations will be amended in Committee.

Mr. Alan Williams: I congratulate my hon. Friend the Member for Clywd, South-West (Mr. Jones) on his fortune in coming first in the ballot and on his choice of subject for the Bill. The hon. Member for Hornchurch (Mr. Squire) referred to the Bill's implications for finance houses and mentioned the Consumer Credit Act 1974. I was fortunate to be the Minister of State in

1974 and I guided that Act in the first independent Department of Consumer Affairs. The present Minister, the Under-Secretary of State for Industry and Consumer Affairs, embodies the residue of that Department and I am glad to see him here today. High though my regard is for the Minister and much though I like him, from where I stand, his Department does not look impressive.
The arguments of the hon. Member for Hornchurch about finance houses are legitimate and deserve consideration. When the Consumer Credit Act 1974 was enacted, there was no intention that business users would be the beneficiaries. The aim was to protect the individual in the market place. It was obvious from the opening and closing comments of the hon. Member for Hornchurch that we have his good will and I am sure that it will be possible for my hon. Friend the Member for Clyvid, South-West and his sponsors to accommodate the serious points that need to be made on behalf of the finance houses. That can be achieved in Committee.
The Consumer Guarantees Bill is one step in a succession of legislative steps intended to overcome the problems that have arisen from the emergence of the consumer society which is the product of a mass production economy. We now mass-produce goods remotely, in isolation, from consumers who will be using those products. Much Government time is spent trying to ensure consumer protection. They have been trying to give consumers the information that they need when they buy goods which have inevitably become enormously complex. They become complex not just in the technicality of production, but in the technology embodied in the products. That technology is often incomprehensible and unascertainable at the time of purchase. We need only consider the use of electronics in cars today to realise that the days of home car repairs are limited. Kits are sold in the United States to convert older cars back to manual as their electronics begin to give trouble. Those unconverted cars are unsaleable because their second-hand value falls so much.

Mr. Michael Stern: In addition to the problems that the right hon. Gentleman described, does he agree that the problems are often compounded by the apparent inability of any western nation to write instruction literature in such a form that it can be understood by anyone other than the person who built the appliance concerned?

Mr. Williams: I attempted the apparently simple process of assembling a desk unit with my daughter. One would have thought that little could be simpler. However, we sat scratching our heads for nearly half an hour trying to interpret what at first seemed to be a simple diagram and trying to work out where to install a particular support piece. The problem is that the person writing the instructions knows what he means and presumes a level of knowledge in the readers which in many cases may not exist—it certainly does not in my case.
The complexity of products has made it much more difficult for the consumer at the time of purchase to know whether the goods are up to the required standard or of the standard described. The Bill goes a short way towards ensuring that what we cannot always ascertain from personal inspection can be taken for granted because of the guarantee that accompanies the product.
Some vested interests oppose that principle for reasons that we can understand. All too often the faults that aggravate the consumer and take up so much of his time—the faults which cause products to be out of use or mean that the car stays in the garage for long periods—are often minor. Those faults could be engineered out and reliability could be engineered in. At the design and specification stage it is possible to engineer in greater reliability at relatively minor cost. Often, the faults that arise from production can equally be engineered out at low cost in the production process.

Mr. Edward Leigh: With regard to minor defects, will the right hon. Gentleman respond to a point made by the motor manufacturers which was not answered by the hon. Member for Clwyd, South-West (Mr. Jones)? The manufacturers claim that
satisfactory quality may include the freedom from minor defects. While we agree that a manufacturer must ensure that such defects are repaired, we do not believe that a minor defect, such as an intermittent fault with an interior light, should allow the consumer to claim a refund or replacement.
Is that not a serious point? Why should such an onus be placed on the retailer and manufacturer for what might be a very minor defect?

Mr. Williams: That is an arguable point. My hon. Friend the Member for Clywd, South-West is reasonable and I am sure that he will be willing to see how far such points can be accommodated. If there is good will on both sides, I do not see why there should be a confrontation on that issue. All hon. Members and their families are consumers. We all have the same interest in ensuring that we and our constituents have reliable goods. All too often it is possible to engineer in, at low cost, protections for the consumer which would incur high costs if the faults were allowed to enter production.
A couple of years after my consumer job, I was involved in the Department of Industry in dealing with the inability of the British television industry to sell components. The hon. Member for Caithness and Sutherland (Mr. Maclennan) was a Minister in the Department with me at the time and may remember what happened. British manufacturers claimed that they could not sell components to Japanese companies operating in the United Kingdom because the Japanese demanded utterly unrealistic standards of performance and reliability from the components. They would accept only minuscule faults in batches delivered to them. We were told that that was an example of the Japanese at it again and that it was a wily endeavour on their part to ensure that British industry could not sell to them.
One of my officials at the Department of Industry took on the task of investigating Japanese standards. He spoke to the Japanese companies to see whether we could discover common ground between them and the British manufacturers. It emerged that the Japanese were asking for component standards in this country no higher than they expected and received from components manufacturers in their own country. More damning—this is why I do not regard too seriously many of the criticisms from

industry about the Bill—the same component manufacturers who claimed that the Japanese standards were unattainable were meeting such standards in their Government defence contracts.
We must put pressure on companies to provide goods of the quality that the public has a right to expect. There is no mandatory element in the Bill and that is important. If I refer to a company by name, I do so for example and not because I am pinpointing it for any other reason. For example, if Ford believes that it cannot meet a guarantee because of production difficulties with a particular component, it does not have to give that guarantee and it is also likely that Ford's competitors would face the same problems. It will not lose the competitive advantage. But if one company is failing at a technical level and another is succeeding, the public have a right to know that the product from that company is more reliable than that produced by the other. The onus is on the company at fault to put its house in order. It should not hide behind a lack of information that prevents the public from discovering the inherent problems in its product.
I was surprised to note the Minister's facial expressions when my hon. Friend the Member for Clwyd, South-West spoke about bureaucracy. Although there are elements of the Bill that we might want to discuss or, conceivably, to amend, I cannot see how it could be described as bureaucratic. One of its main advantages is that it would be self-policing to a great extent and, therefore, of little or no cost to the Government.
Industry may argue that the Bill is too costly, but if industry does not want to meet the cost of ensuring that its products are of a standard that consumers have a right to expect, that is industry's decision. There will be no compulsion on industry, but it cannot expect the consumer to be misled any longer by the type of guarantee given at the time of purchase. I do not believe that the Bill need cost industry.
I was surprised to see a report at the weekend suggesting that the Department wanted to see the Bill killed. I am sorry that the Minister was pinpointed as the initiator of that plan. I would be delighted if he assured me that that was not so. I should be sorry if an attempt were made to talk the Bill out. It would be difficult for the Department to recover its standing with the consumer organisations if it was seen to abuse the advice proffered by those organisations and by the Office of Fair Trading.
Our constituents are the consumers who would be affected by the Bill. At the very least we should ensure that it is not killed off after a cursory Second Reading examination. We owe it to our constituents to give the Bill a detailed examination, with the possibility of amendment, in Committee. That would give us the opportunity to consider many of the problems that legitimately need to be discussed on behalf of consumers. On Third Reading we would then have the opportunity to decide whether the Bill deserved to be supported.
On Second Reading it would be premature for anyone to attempt to frustrate the progress of the Bill. I sincerely hope that that will not happen and I hope that the Minister would not dream of being party to it.

Mr. David Porter: Rarely is a Bill more timely. The daily experience of all the citizens advice bureaux, trading standards officers and all those involved


in the front line of consumer affairs can be added to the evidence gathered by the National Consumer Council—all of which demonstrates there are loopholes in existing consumer legislation. Perhaps that is a generous way in which to describe what most would see as whole rungs missing on a long ladder. The Bill will not solve everything, but its precise certainty should help enormously.
I understand why some of my hon. Friends have reservations about the principles of the Bill—and certainly some have doubts about the details. The Retail Consortium has written to me—I imagine it has also written to other hon. Members—but I submit that none of its objections should prevent the Bill from going to Committee.
What first turned my mind towards, and awakened my interest in, consumer protection was a succession of horror stories that I heard in my surgeries about cars, household goods, toys, builders, replacement windows, holidays and even British Rail. I congratulate the hon. Member for Clwyd, South-West (Mr. Jones), not only on coming top in the ballot—after all, that is the luck of the draw, the hand of fate—but on positively taking up the Bill as his choice.
There has been a fair amount of press and media coverage about the Bill, but there is constant press and media coverage about shoddy goods, lemons and rip-offs. There has always been a torrent of post from individuals—taxpayers, voters, customers and clients—who are landed daily with shoddy goods. The hon. Member for Clwyd, South-West, mentioned that the Office of Fair Trading had estimated that 14 million people a year buy products that turn out to be lemons. Let us suppose that that is a wild over-estimation and let us suppose that those affected amount to 7 million people only. Let us assume that one can shop for 365 days a year—ignoring Sundays, bank holidays and half-days. That means that 20,000 people purchase shoddy goods each day—about 40 a minute in trading hours. Therefore, while I have been talking, another 100 or so people have bought unsatisfactory goods. When they complain, about 50 of them will be fobbed off and they will give up because they feel that there is nothing they can do.
I should like the modest, reasonable expectation of quality, which will be backed up by a guaranteeing act of faith for replacement or compensation, refund or replacement, extended to services. In May, in a ten-minute Bill I sought to supply a measure of compensation, as of right, where public services such as British Rail, the Post Office and local authorities failed to deliver an agreed enforceable minimum standard of service. It was a great idea, but I could not progress with it.
In an Adjournment debate in December, I called for a consumers interests authority—a CIA for Britain. It would be a sort of high street ombudsman, a beefed-up trading standards service acting on behalf of the consumer. That authority could cut through the red tape and bureaucracy when the market could not or would not help the consumer. It was another great idea, but I could not progress with it. Today, I am delighted to be a co-sponsor of this Bill. It is a great idea that can progress, but whether it will is for the House to decide. I am looking forward to hearing my hon. Friend the Minister's views on it, as they are crucial.
Just as there are some cowboy dealers, I accept that there are some pirate customers who seek to abuse existing legislation and good trade practices. That still leaves many

people who fall victim in the grey areas when seeking redress against retailers and who have expectations about manufacturers' products. The Bill will clarify the relationship. The simple beauty of not requiring manufacturers to offer the no-quibble guarantee, but requiring them only to display the warning "no consumer guarantee" will, I hope, appeal to the House. It would certainly appeal to reasonable people on both sides of each consumer trade deal.
In an ideal world, of endless time in the school day, we might well require that consumer education, credit management and consumer rights be part of the national curriculum. Such conditions do not exist, but the broad thrust of the Bill will lend a framework of certainty to the consumer. I should have thought that that would be a welcome spur to the manufacturers, the retailers and suppliers, and the buyers.
It has been argued that the protection offered by the Bill is all too much and that we already have the small claims court procedure to enable consumers to seek redress. All too often, that procedure is patently too daunting and too legalistic. In some cases, it is another field day for lawyers. It has been argued that one could raise the small claims court threshold, but it would still not be customer-friendly. Controls, if they work and are trusted, can be voluntary or they can be part of civil or criminal law, but to initiate such legal controls involves the drawbacks I have already mentioned. The Bill, however, treads a middle path—it represents an achievable one step at a time.
I like the twin aims of the Bill, and I hope that it will be supported. When one peruses a line of cars, videos, tumble driers or whatever in a showroom, the eye will see the warning "no consumer guarantee" displayed on some items. Therefore, every potential customer who can recognise that sign will have a potent weapon with which to enter the battlefield of choice.
The Bill represents a charter for anyone who buys anything big as an aid to modern living. It is therefore a charter for a great many people. Those people may find it difficult to understand should the House not give the Bill a Second Reading today. I add my support to it and I urge the House to say Aye.

Mr. Matthew Taylor: I congratulate the hon. Member for Clwyd, South-West (Mr. Jones) on choosing this subject and on winning the first opportunity to present a Bill. Many hon. Members do not have such an opportunity throughout their careers. He has used his opportunity wisely, and I hope that both Conservative and Opposition Members acknowledge it.
As sponsor of the Bill, the hon. Gentleman has had support from both Conservative and Opposition Members, including that of my right hon. Friend the Member for Yeovil (Mr. Ashdown), the leader of the Liberal Democrats, and that of other members of my party. [HON. MEMBERS: "Where is he?"] I understand that my right hon. Friend has gone to see the storm damage in his village, where several roofs have been destroyed and properties have been wrecked. As we are discussing the difficulties that people have in their day-to-day lives, hon. Members should acknowledge the need for him to do that.

Mr. Stern: Does the hon. Gentleman agree that we are all in the same position? There is considerable damage in


Bristol, and I hope to go down there later this afternoon to see it. Why does the leader of the hon. Gentleman's party require special privileges?

Mr. Taylor: The hon. Gentleman treads a risky line, in view of the few Front-Bench members of his own party who are present. However, we should not waste time on politicking when discussing a subject such as this.
Some hon. Members—I understand that the Minister is among them—may seek to oppose the Bill and prevent it from continuing through the House. If so, it is much to be regretted. Both Conservative and Opposition Members should recognise the great popular support for a measure such as this. The representations that have been made and opinion polls that have been undertaken have already been mentioned.
Perhaps more importantly, any hon. Member will have been approached by constituents who complain about the service that they received from manufacturers. People complain because they expect the standard of service that is written into this Bill to be provided automatically. They do not believe that they should have to fight for it. Yet all too often it is not provided.
The Bill is not about creating added bureaucracy but about responding to the natural and proper expectations of all consumers when they purchase goods for a considerable sum. They expect good service over a considerable period.
I do not claim that the Bill is correct in every detail. That is a matter to be taken up in Committee. If problems cannot be resolved, the House will have a chance on Third Reading to sum up the results of the Committee. If it does not like the Committee's results, it can reject the Bill then. However, at this stage we must acknowledge that if an individual walks into a shop or on to a garage forecourt and parts with a large sum of money for goods which are designed to perform a specific purpose for a long period and to a good standard, he should expect some rights if they do not do so.
The Bill is a modest interpretation of what people naturally expect from manufacturers. In some ways, it is too modest. It is modest because its sponsors intended it to complete its passage through the House, and acknowledge that not all hon. Members see the position in the same way.

Mr. David Wilshire: The hon. Gentleman said that everyone who goes into a shop or on to a garage forecourt should have rights. Is he not aware that they already have rights? It is one thing to say that people's rights are not strong enough, but let us not pretend that they have no rights.

Mr. Taylor: I do not pretend that people have no rights, but people do not have the rights that they properly expect when they purchase high-cost goods. We should acknowledge that, because at some time we have all worked with constituents who come to us about defective goods. We find that we cannot help them because they do not have the rights that we, too, assume they have.
It has been suggested that the Bill will affect the competitiveness of British industry, increase costs and impose a burden on industry. I believe that the contrary is true. First, many manufacturers already sell precisely the goods affected by the Bill in countries which already

demand consumer guarantees. In the United States, the demands made on manufacturers are stronger than those contained in the Bill. Secondly, if the Japanese lesson has taught us anything, surely it is that guaranteed and perceived quality sell products. Sometimes they may sell products that are otherwise less desirable than goods which do not have perceived quality. If we impose this burden—as the Minister may like to call it—on British industry, we shall find that it benefits directly, as firms tighten up their quality. That will be recognised in markets around the world and British competitiveness will be increased.
I see no reason why the Minister and the Department of Trade and Industry should oppose the Bill or seek to delay it. I hope that the Minister will give that his backing and allow it to go into Committee, perhaps to be amended, and eventually to reach the statute book. If he does not give his support, he does not deserve the title of Parliamentary Under-Secretary of State responsible for consumer affairs.

Mr. Gerald Bowden: I, too, congratulate the hon. Member for Clwyd, South-West (Mr. Jones), not only on his good fortune but on his good judgment in choosing this subject.
From the outset, I have supported the principle of the Bill, but I have some reservations about its detail. The purpose of all law is to regulate relationships between individuals. The purpose of justice is to ensure that such relationships are regulated fairly and equitably. The law of contract is particularly important in this respect. It often has to take account of the unequal bargaining positions of parties to a contract. Over the years, contract law has developed through case law. While that has been a good indicator of the problems which come before the courts, it is not always the best way of ensuring that justice is given to individuals.
One recognises the creative judgments of judges such as Lord Denning in deciding how best to interpret contractual terms when they seek to exclude, exempt or limit the rights of a party to a contract. However, from time to time, elements of case law have to be codified into a form of legislation. The Sale of Goods Act 1893 and subsequently the Sale of Goods (Implied Terms) Act 1973, the Sale of Goods Act 1979, and the Unfair Contract Terms Act 1977 were all attempts to strike a fair balance between the consumer or purchaser and the manufacturer, or retailer.
Often manufacturers avoid their clear obligation to the ultimate purchaser by sheltering behind the protection of the law of contract and saying that there is no contract between the manufacturer and the ultimate user, the purchaser. They say that any redress should be through the retailer. In strict law, that is right. Fortunately, the law of tort came to the aid of the law of contract and expanded the idea that anyone who manufactures anything has a duty of care towards the ultimate user. Contract and tort, and statute law are coming closer together.
The Bill does a great deal to assist consumers in the problem that I have described and to give additional support to otherwise defenceless consumers in the face of a monolithic and all-powerful manufacturer or supplier. I am sure that we have all had personal experience of buying defective goods and corresponding with the manufacturer


who tells us that our duty or claim lies against the retailer, but if we go to the retailer, he says that the liability lies with the manufacturer. In such circumstances, when even we who are perhaps more articulate and who have the ability to write such letters are often given the runaround, how much more is that the case for those who do not have the opportunity to make such representations?
It is sad that the word "guarantee" has been misued over the years by many manufacturers. People have innocently felt that, if they signed their name at the bottom of the printed form and sent it off to the manufacturer, they would be protecting their rights, whereas in the past they have often been doing precisely the reverse, limiting or excluding the rights that they might otherwise have had. Therefore, the idea that there should be a "no consumer guarantee" statement on goods, a "consumer guarantee" or a "consumer guarantee plus" statement is a good thing.
I have long advocated that, if a manufacturer or supplier or attaches something in gothic letters that says "guarantee" at the top of the piece of paper, written underneath should be the clear words, "It is the large print which giveth, but the small print which taketh away." That would make it quite clear to anybody purchasing the goods that they do not have any clear rights and that they should make sure that they know what is in the small print.
I know that this morning many hon. Members themselves will be looking at the small print on their insurance policies and that this weekend they will be assisting their constituents to ascertain whether they are covered for any damage that they may have suffered as a result of yesterday's storms. It is therefore apposite that we should discuss this subject this morning.
In giving the Bill my broad support, I must strike a warning note about the difficulty of including words of absolute meaning or of being absolutely precise about how many days, in any one year—two, four or 21, for example,—are allowed for the rectification of a fault.
The law of contract, which regulates relationships between suppliers and consumers, is a subtle instrument and has relied in the past on the use of words such as "reasonable". Although the word "reasonable" does not admit of any precise definition, in isolation it is readily recognised by the majority of people who use the word in a given context, not only by lawyers but also by laymen.
We all recognise reasonable and unreasonable behaviour. The difficulty lies in defining where the line should be drawn between the two in grey areas. That has been the problem faced by the courts in the past and, indeed, those are the cases that come to court for a decision. Laying down in absolute terms the precise number of days that should be allowed for the rectification of a fault has its own inherent problems, but I do not find that point entirely damaging to the concept of the Bill.
In the circumstances it is important that we give the Bill a fair hearing in Committee so that we can discuss these issues and decide what is meant by a "complaint" and whether an oral statement to a mechanic is sufficient to constitute a "complaint" to the manufacturer. These are matters of more precise definition than the Bill at present allows. Therefore, while commending the Bill to the House in principle, I sound that warning note about the precise details.

Mr. David Martin: I rise to support the Bill, which is not particularly revolutionary. The duty of legislation to create conditions so that a trustworthy market can operate for the benefit of the consumer has a long and honourable tradition. In its statutory form, we think especially of the Sale of Goods Act 1893, but before that common law gave many rights to consumers which were then codified in that Act. The legislation on weights and measures is an example of the way in which the market was forced to operate fairly and where intervention was required.
I have absolutely no doubt that setting standards so that the market can operate in that way is good for business. I agree with the hon. Member for Truro (Mr. Taylor) on that point. I have experience not only of practising at the Bar and having to advise clients and appear in court on matters of this kind many years ago, but also as the director of a family caravan business that was originally involved in residential caravan parks and in the sale of caravans and motor homes. Therefore, I know what it is like from both sides.
We used to operate residential caravan park homes before 1975 when the private Member's Bill of my right hon. Friend the Member for Bridgwater (Mr. King) sought to protect the rights of those occupying mobile homes. Before that measure, there was little legislation to give the consumer rights in that market. As my late father founded the business in 1930, we had been in the business for a long time and welcomed the Act when it was introduced by my right hon. Friend the Member for Bridgwater.
That Act set standards in the market place and raised the reputation of those who operated proper parks. Its provisions tallied completely with the way in which we had operated our parks for many years, although the cowboys involved in the business had been getting away with giving us all a bad reputation. Such legislation can be good for business because, just as weights and measures are regulated, we can ensure that the marketplace operates correctly.
The Bill will also clear away some of the archaic language that has been attached to this sphere of consumer interest. I refer to terms such as "merchantable quality" which are well—or at least half well—understood by lawyers and which have been well interpreted over the years to keep pace with the changes in consumer law and consumer expectations. However, they have remained somewhat arcane to members of the public, who increasingly want to be aware of their rights but who are not necessarily aware of the definition of "merchantable quality". Its meaning is fit for sale, fit for its purpose or for its ordinary use. In ordinary English that means "of satisfactory quality", which is precisely what the Bill aims to establish.
I have not been too depressed by thinking about how my hon. Friend the Minister for Consumer Affairs will react to this legislation. To give myself some encouragement, I did not consult The Times or The Daily Telegraph, to which the hon. Member for Clwyd South-West (Mr. Jones) referred but looked in Andrew Roth's "Parliamentary Profiles" to see whether there was anything there that could give me hope. I passed over the description of my hon. Friend as an "anti-interventionist" and as "The Boris Karloff of the House" and the phrase


that he "grins like a rattlesnake". I did not think that those features would be particularly helpful to the future of the Bill. However, I noticed that it is reported that, in October 1986, on his return from the United States of America, my hon. Friend acclaimed its "customer is always right" philosophy.
As has been said, guarantees in the United States of America last longer than one year, faults are put right quickly and salesmen are sometimes criticised for being too eager and too keen to get in touch with the customer after the sale to make sure that everything is all right. The United States recognises that the customer is always right, and having see what happens in the United States my hon. Friend the Minister was converted to that view. That country is right to do so, because it is good for business and the future. It ensures that the free market, free enterprise and capitalism have the best of the argument whenever they are under threat.

Mr. Forth: My hon. Friend has slightly misunderstood what was in my mind at the time. I indeed raise to the highest level the importance of the relationship between the customer or consumer and the supplier and the marketplace. However, I slightly object to and have reservations about interposing the lawyer between them. Our American friends have gone farther down that route, and I hope that we shall resist that.

Mr. Martin: I entirely accept what my hon. Friend has said. However, the law comes very much into this at the moment and has done for many years, especially since 1893 and the interpretations of the various Acts that followed the Sale of Goods Act. History is encrusted with the examples of lawyers. I made a very good living myself from interpreting the law in this area when I practised at the Bar. However, I believe that the Bill will simplify the existing law and make lawyers less able to make money out of the unfortunate experiences of consumers in the particular market to which it is directed.
According to a report in The Independent in May 1989, my hon. Friend the Minister is reported as saying that intervention is seldom needed to protect well-informed, intelligent, educated consumers. Of course I agree with that. I do not know whether it applies to all hon. Members, but I certainly put my hon. Friend the Minister in the category of well-informed, intelligent and educated consumer. However, the Bill is not needed to protect that category of people.
I recently bought a compact disc player at my local Dixons' store. Unfortunately, it will not be covered by the Bill, but, in Committee, hon. Members can examine categories and see whether hi-fi equipment could be included. I took it home, and it did not work, so I rang Dixons' and said, "Your CD player does not work." I was the intelligent, well-informed, educated consumer whom the Minister accepts does not need protection. I was told that to investigate the matter, I would have to pay a £10 call-out fee. I said, "But it's new—I have just bought it. I do not have time to go back to your store today." Dixons' insisted that I would still have to pay the fee. I said, "I am not going to pay it."
I took the CD player back next week. All hon. Members have constituency duties, and I could not get back to the store for another week. When I could, I took

the CD player back and saw the manager. I made a tremendous fuss. I said, "If you like, I will shout out in the store that this CD player is not working. I am going to go away with a new one in my hand." I gloss over the fact that the CD player had gone through their repair department, and the form was ticked to state that there was no fault in it. I got a new CD player, and it works very well, Madam Deputy Speaker. I had to go through all that. I have no doubt that few people will go to those lengths.

Mr. John Maples: My hon. Friend has been through an awful procedure. No doubt many hon. Members have also been through it. My hon. Friend was aware of his rights under the Sale of Goods Act 1979, pointed that out to the manager, and got his way. Of course, any other consumer could have done that, too. How will the Bill help that problem? I do not think that it will. My hon. Friend has addressed the fundamental problem, but I do not know how the Bill will help.

Mr. Martin: The Bill makes a manufacturer liable for the standard of goods that he produces, and it marks a much clearer line of responsibility. As my hon. Friend the Member for Dulwich (Mr. Bowden) said, manufacturers will not be able to say that it is the retailer's responsibility, and a retailer will not be able to say that it is the manufacturer's responsibility, particularly if one is involved in correspondence, rather than doing what I did, which is self-help. One can say, "Regardless of my rights, I have something that does not work. I want it changed." If my hon. Friend the Member for Lewisham, West (Mr. Maples) reads the detail of the Bill, he will see that it improves consumers' rights to redress in a more indirect way than the method I used.

Mr. Stern: My hon. Friend has described an incident that has happened to many people. He referred to a portable appliance. I accept that we could deal with this point in Committee, but, as presently drafted, the Bill appears to be silent about items that are not transportable. Some years ago, I bought a computer desk which collapsed after a few weeks, and I literally had to throw it away. Although the manufacturer was quite happy to accept responsibility, he did not have the ability to come to my house and pick up the pieces, nor did I have the ability to transport them. If I had had to pay for a van to take the pieces back to the shop, it would have amounted to more than the cost of the desk anyway.

Mr. Martin: I sympathise with my hon. Friend. Many of us have had similar experiences. We must strengthen the law, as this Bill will do, so that proper redress will be achieved.
Only 14 per cent. of our people stay at school beyond the age of 16. We do not always create laws for those who are as well-informed, intelligent and dedicated as ourselves. I do not wish to be patronising, but it is a fact also that people are shy and do not wish to press their rights. Very often, they are ignorant of their rights.
The best firms already carry out procedures of this kind. The Bill will codify the best practice. I speak with experience in the law and in business. Someone is just as much a cheat if he sells shoddy goods as new and then argues the toss about putting them right as he would be if he sold underweight goods or short measures of booze. In


Committee hon. Members will be able to clear up many problems. I hope that my hon. Friend the Minister will give the Bill a fair wind.

Mr. Richard Alexander: I join hon. Members in congratulating the hon. Member for Clwyd, South-West (Mr. Jones). I am honoured to be a co-sponsor of the Bill. Consequently, my remarks will be in support of it.
No hon. Member likes to think that we are giving in to unreasonable pressure. Pressure is part of our job in the House, hut, sometimes something comes along which is so obviously in need of reform that the pressure to which we are subject suggests that it would be foolish to ignore it. Our personal judgment would otherwise be eroded.
A report was produced by the National Consumer Council, which was chaired by Baroness OppenheimBarnes. She sent all her colleagues her findings and those of her council about people's experience with goods that do not come up to expectations. I was particularly impressed that the study had taken place over two years. A study which reaches a conclusion after such a time deserves respect.
All of us are confused about our rights if something should go wrong. Of course, if an item does not fit, we are told in advance, "We will change it if it is not right." We may also be told that it will not be exchanged. We may be told that it is a sale item and that exchange is not permitted. That is fair enough. Every customer needs to know where he or she stands. Some customers, such as I and my hon. Friend the Member for Dulwich (Mr. Bowden), the learned editor of "Bowden on Contracts", are well aware of their rights under the law. They are well aware of the Sale of Goods Act 1893 and that goods must be of merchantable quality. However, the problem with

the 1983 Act is that the matter is subject to proof and that a person must be willing to go to court for a remedy if the trader proves to be difficult.
Sometimes, in the case of heavy goods, a consumer is offered a guarantee. "Pressed to take" is a more accurate description of the system of guarantees. It is sometimes impressed on one that a guarantee is part of the deal and that, if one is taking the item, one takes the guarantee. Guarantees are often worthless. They not only remove one's rights under the Sale of Goods Act but they are so hedged about with requirements for the purchaser that he or she just gives up.
Often, one must send the item not to where one bought it but to the manufacturer's head office. Often, one must pay a call-out charge or such sum as the manufacturer may require to post back an item after he has repaired his own faulty goods. That is not much of a guarantee. Under many guarantees, unless one actually does everything strictly by the rules of the guarantee certificate, one loses one's rights under the so-called guarantee. All rights can be rescinded if one accepts a guarantee such as is offered.
On a point of order, Mr. Speaker. Do you wish me to conclude on that point and resume after the statement?

Mr. Speaker: The hon. Gentleman can continue for half a minute.

Mr. Alexander: I am happy to do that, but I was about to start another paragraph.
It will be much easier for the consumer if he knows that unless the trader tells him specifically that he has no guarantee, he will have one—
It being Eleven o'clock, MR. SPEAKER interrupted the proceedings, pursuant to Standing Order No. 11 (Friday sittings).

Storm Damage

11 am

Mr. David Harris: (by private notice): To ask the Secretary of State for the Environment whether he will make a statement on the storms on 25 January and the damage that they caused.

The Minister for Local Government and Inner Cities (Mr. David Hunt): I am grateful to my hon. Friend for giving me the opportunity to tell the House about the violent storm that hit much of the country yesterday. Sadly, we understand that as many as 40 people lost their lives, and many more were injured. I expect that many here today were, as I was, especially saddened to hear of the deaths of the two schoolgirls while at their schools in Swindon and Bristol and the many tragic deaths which occurred. I am sure the whole House will wish to join me in offering heartfelt condolences to the relatives and friends of all those who died, and also in wishing those who have been injured a swift recovery. [HON. MEMBERS: "Hear, hear."]
The storm cut across the south, the midlands and East Anglia, with areas further north also being affected. While I understand that the gusts themselves were not quite as strong as in the great storm of October 1987, they nevertheless hit a much wider area and, of course, this time the storm occurred in the middle of the working day. There has been widespread damage to property. Road and rail links have been blocked and electricity and telephone lines have been down in many areas. We have again lost trees, many apparently weakened by the storm of two years ago. Some casualties were again caused by falling trees.
I am sure that I speak for the whole House in expressing gratitude and admiration for the way in which the emergency and voluntary services, the local authorities, the electricity supply industry and the armed forces have coped with this emergency. They have done a truly magnificent job. The primary responsibility for dealing with emergencies lies with the emergency services and with local authorities. Local authorities have wide discretionary powers to spend money for such purposes under section 138 of the Local Government Act 1972, and they usually include an amount in their budgets to meet such contingencies. They also have the necessary local knowledge, resources and expertise to deal with such emergencies.
It is, of course, much too soon to obtain an accurate picture of the amount of damage that has been done, or the amount of work that has been necessary and will continue to be necessary. However, it is clear that the scale of yesterday's storm was such that some authorities are likely to have incurred costs in dealing with the emergency that are beyond what they reasonably could be expected to bear. For that reason, we announced last night the Government's decision that the special financial arrangements to help local authorities in emergencies—known as the Bellwin scheme—have now been activated and will be available for the areas affected by the storm. My right hon. Friend the Secretary of State for Wales will be making a separate announcement about similar arrangements for Wales. The damage in Scotland has been considerably less than south of the border, but my right hon. and learned Friend, the Secretary of State for Scotland, is keeping a close eye on the position.
Under the Bellwin scheme the Government provide financial assistance to local authorities to help with the additional cost of immediate work to safeguard life or property and to prevent suffering or severe inconvenience. Where the expenditure exceeds a threshold equivalent to a 1p rate for a county council and 0·15p for a shire district, the Government will pay 75 per cent. of the cost. My Department is issuing details about the scheme and the arrangements for claiming help. I should make it clear, however, that the scheme as originally conceived does not cover insurable costs. However, the arrangements are well known to all the local authorities concerned. The expenditure covered by insurance will not be constrained by the controls on local authority capital finance. Where authorities do need to incur capital expenditure that is not covered by insurance, they will be expected to find the money from within their own resources, but where they believe they are unable to do so, I shall consider granting supplementary capital allocations, or credit approvals, in order to allow repairs to go ahead as quickly as possible.
I hope that, given those assurances on financial matters, local authorities will not be hindered from doing all that is necessary to ensure a swift and effective response to the storm. We have made available the resources of the armed forces to help local authorities and the emergency services where needed. I am satisfied that all available resources are being applied where necessary.

Mr. Harris: The whole House will be grateful to my hon. Friend for that statement and will join him in expressing sympathy to the relations of those who died and all those who suffered damage to property. The House will also want to join him in paying tribute to all the members of the emergency services, especially the ambulance men—[HON MEMBERS: "Hear, hear."]—and to those who worked long and hard to try to deal with the aftermath of the storm.
Is my hon. Friend aware that large areas of the south-west, especially Cornwall, are still without electricity? Will he consider further help to correct that position? My hon. Friend will be aware that this is the second time within a month that Cornwall—and my constituency in particular—has suffered from ferocious storms and gales. In making available to local authorities the money that he has spoken about, will my hon. Friend sympathetically consider including in the calculation the costs involved in dealing with the pre-Christmas storms? That is very important.
Finally, will my hon. Friend consider meeting a delegation from Cornwall county council and district councils to discuss not just the cost of clearing up the storm damage, but the longer-term implications, and especially the cost of improving the sea defences, as this is the second time in a month that Cornwall has been hit? I am glad to see my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food sitting next to the Minister.

Mr. Hunt: First, in paying tribute to the emergency services—as he did at the start of his speech—my hon. Friend received the approval of the whole House.
I will not just consider sympathetically his request that we should take into account the expenditure incurred under the Bellwin scheme in dealing with the emergency on 16 and 17 December: I will say positively now that that expenditure will be taken into account.
On my hon. Friend's second question, I am willing to meet a delegation to discuss the issues that he has outlined. As he said, a considerable number of people are still without electricity, but every effort is being made to secure their position as quickly as possible. The Government's response in all Departments concerned is being co-ordinated by my right hon. and learned Friend the Home Secretary.

Mr. Merlyn Rees: The Minister mentioned the timing of the storm, the emergency services, the police and the ambulance service, because they have to come into action. Were the Meteorological Office warnings sent to local authorities in good time? Was an ops room set up in his Department and the Department of Transport to deal quickly with a storm that should have been known about before it struck?

Mr. Hunt: There were warnings by the Meteorological Office, and that is not in question. All Army districts were warned at 19.28 hours on 24 January of impending storms and were instructed to respond to any requests from local authorities for assistance. I will investigate the right hon. Gentleman's points, but there was an immediate and swift response by the emergency services. I commend them for the way that they responded to the serious position.

Mr. Terence L. Higgins: I join my hon. Friend in congratulating the emergency services and in expressing sympathy for those who have suffered from the storm. Does my hon. Friend recall that a similar statement on finance was made after the hurricane in 1987? It was discovered then that, because of the way in which the grant system worked, local authorities did not get the benefit expected. Initially, it was discovered that West Sussex council would have been refunding money to the Treasury. Will my hon. Friend give an assurance that this will not happen again?

Mr. Hunt: As my right hon. Friend knows, with all his financial experience, a different local authority expenditure regime was in place then. I should like to make it clear that the authorities' expenditure in connection with this emergency will not affect the amount of grant that they receive.

Mr. Matthew Taylor: I should like to extend our condolences to the families of the bereaved and those who have been injured, and our congratulations to the emergency services—not least the ambulance services—for the effort, hard work and bravery that they have shown once again during these problems.
Has the Minister yet set in place a review of the Bellwin scheme, given the changes that have taken place in local authority funding? Is it possible to bring such a review forward? I believe that the scheme is not sufficiently generous. I very much welcome the hon. Gentleman's response to the hon. Member for St. Ives (Mr. Harris) that the damage caused in the two storms which have already hit Cornwall will be included in the calculations, but more help is needed. This matter needs clarification.
Have the Minister and the military services considered the possibility of the armed forces helping to track down breaks in the electricity lines? As the hon. Member for St. Ives said, large parts of Cornwall still have no electricity service.

Mr. Hunt: The House joins the hon. Gentleman in paying those tributes to the emergency services. Obviously, a 1p rate will no longer be relevant in the new system of local government finance which commences on 1 April. We intend to continue the Bellwin scheme, and we shall announce proposals on which we shall consult local authorities. The hon. Gentleman need have no fears about that.
My right hon. Friend the Secretary of State for Energy is doing everything he can to restore electricity supplies, and is working in conjuction with my right hon. Friend the Secretary of State for Defence to ensure that all the services are given the support that they need. I understand that all affected police forces issued warnings through the media about the dangers of travel. Devon and Cornwall issued an advance warning in the morning based on the Meteorological Office storm warning. Other forces would have received the Meteorological Office warning and would have been prepared to respond when the situation in their area became threatening.

Sir Peter Emery: Does my hon. Friend appreciate that two groups have worked very hard? Electricity workers have worked constantly since the start of the storm, including all night, to restore electricity supplies. They have been doing a remarkable job in the south-west, as have those who were called in to clear the roads. One of the great problems was the blockage caused by traffic, and considerable work has been done to relieve that problem.
Will my hon. Friend give an assurance that there will be no cut-off date on which funds for damage clearance will be stopped? It will be a considerable time before all the clearance can be completed.
Does my hon. Friend realise that, for most of us in the south-west, the cost will be way above a 1p rate? It has been estimated that it will add 2p to the community charge. That will not be easy to bear. Should not certain areas, especially those that have suffered damage before, be considered more favourably than they would be under the Bellwin scheme? Will my hon. Friend consider the special cases sympathetically?

Mr. Hunt: Having listened to the tributes paid by right hon. and hon. Members, I will ensure as soon as I leave the Chamber that their messages are passed immediately to the emergency services concerned.
I was sad to hear that up to I million consumers are still cut off from electricity supplies. The worst damage has occured in the areas of the south-west, south and south-east boards; the eastern area is fairly badly hit; and there has been some disruption in south Wales and the midlands.
Help is being given by boards further north and by Northern Ireland and Eire when they can spare it. The less badly affected areas aim to restore all supplies today. Sadly, supplies in the south-west, south and south-east board areas may not be restored until Sunday or Monday. Every attempt is being made to help the individuals involved.
I have announced in response to my hon. Friend the Member for St. Ives (Mr. Harris) that we shall include the damage caused on 16 and 17 December when calculating the threshold above which the Bellwin scheme will operate.

Mr. Stanley Orme (Salford, East): When the Minister passes on the views and thanks of the House to the


emergency services, whose work has been magnificent, will he also take account of the fact that the ambulance services turned out overwhelmingly, although many were involved in an industrial dispute? Will the hon. Gentleman bear in mind the fact that the police, ambulance and fire services and the armed forces are necessary and that the public find it extraordinary that the Government should continue a dispute with the ambulance services which could be resolved? Will the hon. Gentleman pass on to his colleagues, including the Secretary of State for Health, the message that another endeavour should be made to resolve that dispute?

Mr. Hunt: We are extremely grateful to, and commend, those ambulance men and women who suspended their industrial action and turned out to help, but we should not turn this occasion into an opportunity for making political points about the stoppages.

Mr. Ian Gow: Was not much of the property owned by district and county councils in October 1987 either uninsured or under-insured? Will my hon. Friend make it clear that taxpayers' money will not be used to assist those local authorities which either have decided not to insure against insurable risks or which are under-insured?

Mr. Hunt: I give my hon. Friend that assurance.

Mr. Alan Williams: I believe that the Minister said that the Army was notified the day before the storm. Will he explain to the public why no public warnings were given? Does he realise that, when a hurricane is pending in the United States, there are constant warnings not just of the scale of the storm but of particular hazards that need to be avoided? Had such warnings been issued yesterday, some of the deaths might well have been avoided.
On Bellwin, will the hon. Gentleman note that to most of us his comments were inadequate? Because of massive damage to council housing stock, my authority will have to meet the first £430,000 of the repair costs plus one quarter of all further costs. We are nearing the end of the financial year: the council has no funds in reserve; and it is under pressure from the Secretary of State for the Environment to hold the poll tax down. We need money from the Government, and we need it now.

Mr. Hunt: As I understand it, public warnings were issued. If the right hon. Gentleman will reflect on what I said, he will understand that I made that absolutely clear.
A Conservative Government introduced the Bellwin scheme, which was the first comprehensive attempt to meet this sort of problem. We have kept the threshold to exactly the level it was several years ago, when the scheme was originally announced. We have not uprated the 1p rate in accordance with inflation. It is a generous scheme. The important thing is that local authorities all know exactly where they stand. It is a long-proven scheme, and they all know its details. Therefore, our announcement last night made it clear how the bills would be paid, so that local authorities and everyone else could concentrate on protecting people and property.

Mr. Roger Gale: I know that all right hon. and hon. Members join me and the Minister in

expressing sympathy with people who suffered injury, damage and loss last night. Kent county council has asked me to express to the Minister and to his colleagues their tremendous appreciation for the speed with which the Department has moved, and for the statement this morning. The chief executive told me this morning that Kent is likely to have suffered losses of £5 million, and that figure is still rising.
My hon. Friend will know that, following the storms of 1987, there was some delay in processing the claims that the Department were good enough to meet, due to the assessment of damage resulting from the storm and damage that might be construed as improvement. I hope that we shall not suffer the same delays again.
Finally, Mr. Speaker—

Mr. Speaker: No.

Mr. David Hunt: May I deal with the Bellwin points first, so that everyone is clear about the criteria? The damage must have arisen on 25 January and expenditure must be used for carrying out immediate works to safeguard life or property or to prevent suffering or severe inconvenience.
We are writing to local authorities to remind them of details of the scheme, and to outline how claims can be made. I shall certainly consider carefully the matter that my hon. Friend has raised—that claims must be dealt with as quickly as possible.

Several Hon. Members: rose—

Mr. Speaker: I must remind the House that this is a private Members' day, so I urge hon. Members to confine themselves to specific questions, and perhaps ones that have not been asked before.

Mr. John Fraser: May I tell the Minister that the Bellwin scheme is not good enough? Local authorities are at the end of their financial year and some of them, such as my own, are under spending restrictions. We have had to rehouse 70 families from two tower blocks, when we already have 2,000 homeless. First, will he reconsider the matter, because the cost to local authorities that are already hard-pressed could be enormous? Secondly, is it not correct that under the new housing finance regime, housing costs could be ring-fenced and would fall upon other housing tenants? Thirdly, the frames of two tower blocks in my constituency may have been twisted by the wind. In view of that, will he reconsider the restrictions on capital expenditure, which is almost being used as blackmail because people will not accept a housing action trust scheme?

Mr. Hunt: The hon. Gentleman was in the last Labour Government, and if he examines what we are doing on this occasion he will find that there are generous provisions under the Bellwin scheme. Every local authority knows the scheme well and knows how to operate it. Therefore, last night, when we made the immediate decision to invoke the scheme, they were able to concentrate on protecting people and property.
I shall consider the point that the hon. Gentleman raised about ring-fencing the housing revenue account, and write to him. I am unaware that it would have that effect.
I have already made absolutely clear what the effects will be on capital restrictions and the way in which I shall consider supplementary credit approvals and capital allocations.

Mr. Michael Stern: I thank my hon. Friend for his statement, and in particular, what he said about Bristol. Would he briefly explain the effects of the Bellwin scheme on statutory authorities other than local authorities? I am thinking about the severe damage to the roof of a national landmark—Temple Meads station in Bristol. I am not sure whether provision for repairs will necessarily be made by British Rail.

Mr. Hunt: I am concerned to hear about the damage to Temple Meads station because I know the building well. That gives me an opportunity to pay tribute to British Rail because there was considerable destruction last night and already there has been a significant recovery in services. I wish to commend the staff and all those involved within British Rail who responded so quickly to the emergency. I understand that British Rail provided accommodation for people who were stranded at stations, and I think they set a good example.
I shall study the question of Temple Meads station and write to my hon. Friend.

Mr. Ieuan Wyn Jones: Although we welcome the hon. Gentleman's statement and its effects on local authorities, I am concerned that there is no Welsh Office Minister present, bearing in mind that ferocious gales lashed Wales yesterday. In addition to the finance to local authorities, and following on the matter raised by the hon. Member for Bristol, North-West (Mr. Stern), will he ensure that, if finance is necessary to repair the Cambrian coastline service—I understand that the station at Llangelynnin was demolished yesterday and I pay tribute to the six railway men who worked hard to ensure that no danger to the public resulted—and if British Rail requires funds for that work, its applications will be met by the Government?

Mr. Hunt: My right hon. and learned Friend the Home Secretary is co-ordinating all Government Departments and is closely in touch with Ministers from the Welsh Office and the Scottish Office, as well as other Ministers involved. Therefore, I do not think that the hon. Gentleman is right to make an issue of the absence of a Welsh Office Minister in the House today. I know that they are actively considering the position and doing everything they can.

Mr. Edward Leigh: Following the previous great storm, the Secretary of State asked the Countryside Commission to set up a special programme to save damaged trees. Since then, about £5 million in grants has been paid out, and more than 800,000 trees have been funded as a result. Can my hon. Friend give a commitment today that he will consider extending that scheme to other parts of the country and to continue it if necessary?

Mr Hunt: I should like to respond positively to my hon. Friend. The royal parks are the direct responsibility of my right hon. Friend the Secretary of State for the Environment. We are assessing the situation, but we are determined to make good the losses and to replant so that future generations will continue to enjoy our heritage of

fine trees. My hon. Friend is right to refer to the question raised by my right hon. Friend the Secretary of State. The unit Task Force Trees has been working through local authorities and other organisations to assess damage and priorities for action and to give advice. It will be arranging payments of grants. We are considering a continuation of Task Force Trees and an extension of its remit to all affected areas of the country.

Mr. Stuart Bell: The Secretary of State was kind enough to mention the areas gravely affected by the storm last night. In Cleveland, a Middlesbrough man was killed in his car by a falling tree, and electricity supplies have been cut off. May I have his assurance that the Bellwin scheme will apply to Cleveland? May I also refer the Secretary of State to a statement in today's Daily Mirror which says that Gorden Kaye, the actor, was taken to hospital after being rescued by the ambulance services. On his way to hospital he said to them, "You are worth more than 10 per cent."

Mr. Hunt: On the first point, my announcement about the Bellwin scheme applies throughout England. I am aware that the storm has hit certain parts of the country badly and has left few areas totally unaffected.
On the second point, I am a great admirer of the star of "'Allo 'Allo" and I am sad to hear that he has been injured, but I do not think that he would want the hon. Gentleman to raise the matter he has just raised in this context.

Mr. Michael Brown: Is there any possibility that the European Commission will assist us? Will my hon. Friend confirm that they made finance available for those people who lost their lives, for the bereaved and for people who suffered damage in the December storms. Will there be any assistance from the social fund for yesterday's storm?

Mr. Hunt: I understand that my right hon. and learned Friend the Home Secretary is in touch with the European Commission. The EC social fund gave the United Kingdom some £220,000, after the December storms, for individuals who lost relatives or suffered loss or hardship. The Commission is meeting this afternoon to consider whether to make a further grant for yesterday's storm, and I hope that it will be sympathetic.

Mr. Bruce Grocott: Will the Minister acknowledge that, whenever serious problems of this sort occur, it is not central Government that have the job of clearing up the mess, nor the private sector, but local authorities and local authority manual workers? Will he also acknowledge that the professionalism of local government has been constantly and consistently undermined by 10 years of Conservative Government? As a result of what happened yesterday, rather than take the easy conclusion of the one-off payment to deal with the problem, will the hon. Gentleman draw the more important general conclusion that local authorities must have their confidence and professionalism restored?

Mr. Hunt: The hon. Gentleman has the picture wrong. I made the comment earlier, and I now reinforce it, that I pay warm tribute to all those in local authorities who responded so magnificently to this problem. They have done so with great professionalism and skill and at obvious cost to themselves in their personal lives. I think


that the hon. Gentleman will find that the atmosphere in local government is not as he describes. I shall be going from the Chamber to join one local authority which is already dealing very effectively with the situation.

Mr. Anthony Steen: Is the Minister aware that south Devon and Dartmoor were particularly badly hit last night and that north Dorset was hit by a tornado? Two of my constituents who live on the edge of Dartmoor lost their lives. Will he please explain to the South Hams district council, whose 1p rate amounts to only £90,000, how it will be able to repair over £100,000 worth of damage to council houses and over £800,000 worth of damage to roads and other structures?

Mr. Hunt: I made it absolutely clear, to my hon. Friend the Member for St. Ives (Mr. Harris) and other hon. Members, that, as yet, it is impossible to calculate what the final bills will be. However, as I said to my hon. Friend, I shall be very pleased to meet officials from his district council and to consider the position with them.

Mr. Harry Barnes: Should not the Bellwin scheme be used more widely? There is some doubt whether it is to be employed in Scotland. Furthermore, those authorities to which the Bellwin scheme applies will still have to meet well over 25 per cent. of the expenditure out of their contingency funds. That will have a knock-on effect on the poll tax. It will also have a knock-on effect in Scotland in connection with the poll tax. How will the Bellwin scheme rules affect the poll tax?

Mr. Hunt: I thought that what was most important last night was the need to establish certainty and to make it clear to local authorities that the Bellwin scheme, which they know well, will be put into operation immediately. We have done that. As for the amounts involved, I believe that it is a generous scheme. My right hon. Friend and I intend to incorporate the scheme into the new system. It gets the balance right between the taxpayer on the one hand and the ratepayer and the future community charge payer on the other.

Mr. Richard Holt: Does my hon. Friend accept that his statement will be welcomed by local government? I am particularly pleased about his flexible attitude towards the Bellwin plan. I believe that it has cobwebs on it that need to be dusted off. Where there is strict control over the amount of money that can be given by central Government and open-ended expenditure by local authorities, that must give rise to concern.
I also pay tribute to the emergency services. However, on a slightly discordant note, I ought to point out that I believe that the Metropolitan Police could have done a great deal more to move London's traffic by the deployment of 40 to 50 policemen at strategic points where there were bottlenecks. No action whatsoever was taken. Even this morning there is slow-moving traffic in London because of failure by the police to control the traffic flow, which has absolutely nothing to do with the damage.

Mr. Hunt: For the avoidance of any doubt, I should say that I have not announced any flexibility in the Bellwin scheme. I have explained to Opposition Members that it introduces a note of certainty. Every local authority knows exactly where it is with the Bellwin scheme. I said that I

intended to incorporate the Bellwin scheme into the new system of local government finance on 1 April. As for the Metropolitan Police, my hon. Friend is being a little unfair. I was in and around Westminster last night where there was a tremendous crush. I thought that the Metropolitan Police handled it extremely well and swiftly. Obviously, however, my hon. Friend's remarks will have been heard by my right hon. and learned Friend the Home Secretary.

Several Hon. Members: rose—

Mr. Speaker: Will hon. Members who are rising to their feet please ask brief questions? I realise that the storm has affected most constituencies in the country, so I shall call all those hon. Members, but I ask them to be brief, please.

Mr. Elliot Morley: I do not think that anybody can criticise the Met Office this time for its storm prediction. However, when a storm of this intensity hits other countries, notably America, there are regular storm warnings. I refer in particular to the scaffolding and construction sheeting that was blown off buildings yesterday in urban areas, particularly in London. It caused damage, delays and disruption. Will the Government consider providing greater guidance and warning to those in the construction industry so that they can take steps to prevent that happening?

Mr. Hunt: May I just establish what happens over warnings? The emergency services have statutory and common law duties to preserve life and protect the public. In a major emergency, the police are responsible for the overall co-ordination at the scene of an incident and for allowing fire and ambulance staff to carry out their specialist functions. When a storm affects wide areas, the police are responsible for issuing public safety advice about the dangers of travelling, and they would close roads that were judged to be unsafe. That would be in addition to their particular functions. I understand that public warnings were issued. Nevertheless, we shall keep the matter under review in the light of what happened on this occasion. I believe that the emergency services responded in a magnificent and typically professional way.

Mr. Bob Cryer: Will the Minister ensure that any consequences of the damage caused by the hurricane are not inhibited by the suggestion from the hon. Member for Eastbourne (Mr. Gow) and that, if a council has been at fault, the fault should not be a burden on the people of that area because of under-insurance? That seemed to me to be a very mean suggestion. As local authorities will be the main organisations to carry out restoration after storm damage, will the Minister also take on board British Rail's difficult financial position and the fact that storm damage will have cost it several million pounds? Will the Government provide more capital so that British Rail can meet the additional cost? It is already absolutely hamstrung by cash shortages.

Mr. Hunt: I shall of course ensure that the hon. Gentleman's comments about British Rail are passed to my right hon. Friend the Secretary of State for Transport. As for his point about insurable risks, the Bellwin scheme is very well known and has been in operation for a number of years. Local authorities know exactly where they stand. They know that the damage must, under the criteria, be


non-insurable. I should have thought, therefore, that every prudent and careful local authority would have adequate insurance.

Mr. Rhodri Morgan: The Minister will be aware that vesting day in the electricity supply industry is only about 65 days away. According to those in the industry to whom I have spoken, after that date no provision will be made for action such as that which was taken last night to switch linesmen from unaffected areas to carry out emergency repairs in affected areas. That was done magnificently in October 1987 and again last night. That was a well established procedure prior to vesting day. The new distribution companies will have a primary duty only to their shareholders. They will not have a primary duty to participate in emergency work. Is the Minister able to assure me that, if a storm occurs subsequent to vesting day, the same emergency arrangements will still apply, whereby linesmen from unaffected areas will be switched to affected areas where cables have been damaged?

Mr. Hunt: I do not think that that will be affected by statute. In an emergency, everybody responds. Last night, people, voluntarily and in accordance with their duties, combined to produce the maximum impact to help people and to protect property.

Mr. Dennis Skinner: Some might argue that the Minister was a little lucky yesterday, with the emergency services being stretched as a result of the ambulance dispute, caused primarily by the Government. It makes sense for the Government in winter, when there are likely to be hurricanes and storms, to have all the emergency services at full tilt all the time. Is the Minister aware that he might well be hamstrung by the fact that he has already spent £30 million—or his hon. Friends have—on financing the alternative to the ambulance workers? As at least three months of the winter still remain, it would make sense to settle the ambulance dispute so that, if there is another emergency, the whole show is back on the road.

Mr. Hunt: I am pleased that so few Opposition Members have sought to make that kind of point. What makes me, and I believe the whole House, proud about our emergency services is that, whatever the background to the emergency, they immediately respond. They do so in a magnificent way, and I have already commended them for that.

Mr. Harry Cohen: Before he finishes, will the Minister pay a specific tribute to the ambulance workers for saving lives on a day when the courts at the behest of health managers and the Government, were preventing them from running emergency services in many parts of the country? Does he not think that that was obscene during a full-scale emergency?

Mr. Hunt: As so often, the hon. Gentleman has followed in the steps of his hon. Friend the hon. Member for Bolsover (Mr. Skinner). I have already paid specific tribute to the ambulance men and women who gave so freely of their services and responded so magnificently during the currency of the dispute. I unhesitatingly do so again.

Mr. Bryan Gould: May I join the Minister in offering our heartfelt sympathy for all those who were tragically bereaved, injured or suffered other serious loss as a consequence of the storms? May we also offer our

gratitude and congratulations to the emergency and other services, who again demonstrated how much we depend on them at times of need and how unstintingly they give of their time, effort and courage when the call comes? Will the Minister recognise that the ambulance workers in particular—I am sorry that he did not feel able to mention them in his opening answers—have again shown that their sense of duty to the community overrides all other considerations? Can we hope that, when the current crisis is over, the Government in equal measure will recognise their reciprocal responsibilities to the ambulance workers and offer them a fair settlement?
I express our concern at the extent of the damage and disruption caused to property, to essential services and to our national heritage in Scotland and Wales as well as in England, and our awareness of the huge burden that that will mean for public, and particularly local, authorities. Therefore, I give a qualified welcome to the Minister's assurance that some resources will be available from central Government to meet those new and unexpected commitments.
Does the hon. Gentleman accept that the immediate problem may be cash flow—a problem exacerbated by the difficulties that many local authorities will face in the run-up to the poll tax—and that the immediacy of the help may be just as important as its quantity? Will he also give an assurance that, when the immediate crisis is cleared, the Government will not revert to their traditional attitude of hostility towards local government spending?
I must therefore express my disappointment and regret that the help being offered to local authorities is constrained by the limits implicit in the Bellwin scheme. As Conservative Members have pointed out, that means that we face a repeat of what happened in 1987, as local authorities are again required to find the first tranche of emergency expenditure from their own resources, but on this occasion those resources are in even scarcer supply, given the problems that local authorities face in relation to the poll tax.
Will the Minister assure us that there is no prospect—and there ought to be no prospect—that local authorities will be faced with penalties or that poll tax payers will be required to pick up the additional bill? Why cannot the Government reimburse local authorities for every penny of such unforeseen expenditure? Will he not reconsider that, as my hon. Friend the Member for Norwood (Mr. Fraser) has asked him?
What arrangements has the Minister tried to make with his right hon. Friends in the Department of Social Security for those on income support who may now face substantial and unplanned expenditure?
Finally, although the storm was accurately forecast, we must now surely recognise that such storms are no longer a once-in-a-century phenomenon. Whether that is a consequence of global warming—although that possibility should give urgency to the measures we put in place to deal with that problem—we must now recognise that it is essential to prepare and co-ordinate better arrangements to reduce and prevent damage after such warnings. Will the Minister therefore tell us what long-term arrangements he has set in train to cope with the new situation?

Mr. Hunt: I counted 10 points in that question. I am grateful to the hon. Gentleman for joining in the tributes that the House has so warmly paid to the emergency services and the sympathy that it has extended to all those


who have been seriously affected by what has happened. On the hon. Gentleman's third point about the ambulance services, I made it absolutely clear in my statement, saying:
I am sure that I speak for the whole House in expressing gratitude and admiration for the way in which the emergency and voluntary services, the local authorities…coped with this emergency.
As soon as one of the emergency services had been singled out, I took the opportunity to pay tribute to it.
As the hon. Gentleman has done so, I must pay tribute to the other emergency services for the magnificent way in which they responded. As soon as the ambulance services had been singled out, I immediately paid tribute to those ambulance men and women who so swiftly came to the assistance of people in trouble. They always do that, and they have a magnificent record, but so have the police, the fire brigade and local authorities.
The hon. Gentleman's fourth point was to give a qualified welcome to my announcement. A qualified welcome from the hon. Gentleman is a great tribute, and I am grateful to him. He is right to welcome the announcement I have made, because local authorities know exactly where they stand. The scheme is long-established; there is no need for any local authority to query its application, as they know how it works. We believe that we have got the balance right between the taxpayer and the ratepayer and the future community charge payer. It is not Government money or local authority money: it is money that is raised from the people, and it is necessary to achieve a balance between the taxpayer and the person who is contributing to local authority spending.
The hon. Gentleman stressed the immediacy of help. Of course help must be immediate and swift, and we are

making it clear to local authorities throughout the country that, as and when they have claimed under the scheme, those claims will be met as speedily as we can possibly pay them.
In regard to hostility to local authority spending, the hon. Gentleman is probably a little out of date. Many years ago, one of his right hon. Friends told local authorities, "The party's over." He may not remember that, but I do. There has always been a history of trying to contain local authority spending, and we are doing so more effectively than any previous Government.
There are no penalties on local authorities. I have made it absolutely clear that the expenditure by local authorities will not affect the amount of grant they will receive.
Those on income support will receive help from social security offices if they contact them, and will receive special help in special circumstances which rank for payment under the scheme which my right hon. Friends at the Department of Social Security are advancing.
In regard to global warming, my right hon. Friend the Secretary of State is now in Africa making a speech about the problems of global warming and following up the lead that Britain has given the world in seeking to address that problem. We should be aware of that, and the Opposition should pay tribute to it.
In the long term, we shall consider every situation to discover how the arrangements can be improved—[Interruption.]—yes, which way improvements can be made to the existing arrangements—but I said absolutely clearly that we are satisfied that there has been an immediate and effective response and we shall do our best under the leadership of my right hon. and learned Friend the Home Secretary, to ensure that that response continues for as long as necessary.

Consumer Guarantees Bill

Question again proposed, That the Bill be now read a Second time.

Mr. Speaker: In fairness to the hon. Member for Clwyd, South-West (Mr. Jones), who has had some time taken from the debate on his private Bill, may I ask hon. Members now participating in the debate to adjust their speeches so that he does not lose any more time.

Mr. Alexander: The House was wise to receive that exchange of concern, although it took place just as I was warming to my theme.
I was explaining the difficulties experienced when a customer finds that the goods that he has bought do not come up to his original expectations. I was arguing that it would be much easier if the customer knew, unless he was prominently informed otherwise, that he will have a guarantee. It is wrong and frustrating when something goes wrong with an item that one has bought within a year, because one must either comply with the restrictive terms of the so-called guarantee or wait for the item to be sent back to the works, where the defect may be dealt with some time in the future.
Even more frustrating for the customer is to be told that, as he has used an item—driven it, washed something in it, or watched something on it—for a month or two he has no redress. All hon. Members want business to succeed and do not want the Bill to harm or be a burden on it, but if business is encouraged to sharpen its service to the customer it will achieve greater success. A business that stands by its work deserves to succeed.
It is important to point out that the provisions of the Bill are not compulsory. Nothing obliges the manufacturer or trader to give a guarantee, but it enables the customer to know where he stands.
I speak as a qualified solicitor, although I am not declaring an interest, as I am no longer a partner in a firm. It has been suggested inside and outside the House that if consumer problems are not resolved simply, lawyers will gain business.

Mr. Stern: Will my hon. Friend give way?

Mr. Alexander: May I make a little progress?
In my experience, no family solicitor likes to take on a client who has a claim about defective goods, because he knows that it will be tedious, time-consuming and frustrating for the client, for whom almost invariably he will be unable to get much satisfaction. I should like it to be known that the legal profession does not seek the business of dissatisfied customers who have goods with which they are not satisfied.
I have been impressed that almost all the organisations that have contacted me and the hon. Member for Clwyd, South-West (Mr. Jones), although they may have ideas on improving the Bill, have accepted the principle behind it. Perhaps a little to my surprise, the Society of Motor Manufacturers and Traders, almost all the major car manufacturers and the Retail Consortium, which sent a useful briefing, accept the Bill in principle.
It seems that only my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs is hostile to it. I await his speech with interest, but I gather from the press that he feels that it would be too bureaucratic. I can

understand the Minister believing that any legislation, particularly that emanating from his Department. is likely to be bureaucratic—bureaucracy is involved in much legislation—but I would like him to reflect on the fact that Ministers have hardly ever commended reforming legislation under the private Members' ballot. Ministers usually say that such Bills involve bureaucracy and that they cannot commend them to the House.

Mr. Forth: So that there is no misunderstanding, and to be fair to the Society of Motor Manufacturers and Traders—I may not have a chance to deal with the problem in my speech—let me make it clear to the House that I have a letter from the society, which I have its permission to use, which states:
the Bill contains a number of serious flaws which will only give rise to dispute should the Bill become law… we believe that legislation of this sort should not be rushed through Parliament by way of a Private Member's Bill.
I think that the House should know that that is the position.

Mr. Alexander: I am grateful to my hon. Friend for correcting me. I had understood from press releases that the society was in favour, but if that is its view, unreservedly withdraw my remark.
My hon. Friend the present Minister is a successor of Baroness Oppenheim-Barnes, who was Minister for Consumer Affairs—a very distinguished one, too—when I first came to the House. She promoted the idea behind the Bill. She clearly thought that it would be workable and that such proposals could be commended to the House.
For the customer, the Bill should be simplicity itself. The customer will know that he or she has the right to a replacement or a refund if something goes wrong during the first 12 months after the purchase has been made. The manufacturer will know that, if he gives that guarantee, his product will be enhanced. The Bill certainly needs some smartening up—no private Member's Bill does not—and amendments will be made as it proceeds through the House, but that is not a reason to reject the Bill, and I hope that my hon. Friend the Minister will not advise us to reject a measure of such obvious benefit to our constituents.
It is the most vulnerable of our constituents who will benefit if the Bill becomes law—the person who is too intimidated to go to law or too confused to argue his case with the manufacturers, the trader or even the small claims court. It is a Bill that gives such obvious national benefit that I should be astonished to find anyone voting against it or anyone completely against it. I join the hon. Member for Clwyd, South-West in commending it to the House.

Mr. Hugo Summerson: After the private notice question about the storm, we have to get back into the swing of the debate, so let me begin by congratulating the hon. Member for Clwyd, South-West (Mr. Jones) on drawing first place in the ballot. Goodness only knows how he did it. I think that next time we have a ballot I shall ask him to write my name in the book for me, then perhaps some of his good luck will rub off on me.
I am sorry that the hon. Member for Clwyd, South-West does not have more of his own hon. Friends here to support him today. It is true that the storm may have something to do with it, but some of the Labour Members who have been stuck at King's Cross and Euston


might have taken the opportunity to come rushing back to support him. That was not to be, but the hon. Gentleman seems to be getting plenty of support from Conservative Benches.

Mr. Ron Davies: The hon. Gentleman has given me the opportunity to assure the House that my hon. Friend has a great deal of support from Opposition Members, but we are anxious that the Bill should be given its Second Reading this morning, so I have prevailed on my hon. Friends not to make long speeches. We could do so if necessary. I hope that the hon. Gentleman understands.

Mr. Summerson: Of course, I understand that and I join the hon. Gentleman in his wish that the Bill should have its Second Reading.
To start with, I had strong reservations about the Bill. I have always been a firm believer in the efficacy of the market and I have always believed that regulation or prospective regulation should be looked at closely. However, I also believe that a measure of regulation can be helpful to the market. The market is sometimes a muddled place. Anyone who walks down a street market will see the basics of a market at work and that there can be a muddle. Once I had read through the Bill—I assure the House that I have—I thought that many of its provisions were excellent and would add a great deal to consumer choice.
My hon. Friend the Member for York (Mr. Gregory) described the Bill as a "caring" Bill. As he used those words, I am sure that I saw my hon. Friend the Minister's teeth growing longer and more pointed. However, I see that his teeth have now receded and I hope that when he comments on the Bill, he will accept that many Conservative Members have made comments in favour of it. It is not an especially long or stringent measure and it places great stress on voluntary co-operation with manufacturers, which has persuaded me to support it.
What is the present process when we go into a shop and buy goods, and how do guarantees arise? When one buys goods, one spends half an hour back home unpacking the item, by which time the floor is probably covered in shavings, packaging and bits of cardboard which, in turn, give rise to rubbish. One tends to think about recycling, but I must not be diverted. Doubtless a small postcard eventually falls out of the packaging. Attached to the postcard are a number of paragraphs of extraordinary verbiage, which no one can understand, and small print which goes on at length. One will find somewhere that one is enjoined to fill in the card and return it to the manufacturer.
All too often, one forgets either to fill it in or to post it. If one gets as far as filling it in, putting a stamp on it and posting it, there is always the thought at the back of one's mind that one will be submerged in floods of junk mail. One thinks, "Will the manufacturer put me on the lists of all his chums in the trade?" Next, the postman staggers up the stairs weighed down with junk mail. I have moved house three or four times in the past three years and at the last address but three, bagfulls of junk mail are still arriving, which drive the present owner of the house mad. I have had to incur expenditure in going to the local post office, filling out yet another card and paying an extraordinarily fat fee to the Post Office for the privilege

and pleasure of ensuring that all that junk mail is forwarded to me at my present address. That does no one but the Post Office any good.
People come to my surgery, as other hon. Members have said, to complain about goods that they have bought, which are shoddily manufactured and which give bad service. They say, "What is the law on this point?" People think that as we make the laws, we should know what the laws are. They invariably look disappointed when I say that I am sorry that I do not know what the law is on the subject and that I shall have to find out. They say, "For goodness sake, you are a Member of Parliament and Parliament makes the laws. Why don't you know what is in them?" I say that they have only to look at the previous Session, when goodness knows how many Bills were passed. I confess that I have not even looked at quite a few of them. As a result, people go away thinking that their Member of Parliament is not giving them a very good service. If I say that they should consult a solicitor, they think that I am in cahoots with the local solicitors, which is not true.
Should manufacturers give a consumer guarantee? I can think of some firms that would have no hesitation in giving a guarantee and the name Rolls-Royce springs instantly to mind. Rolls-Royce is a simile for excellent workmanship, pride in craftsmanship and British endeavour. I am sure that Rolls-Royce would have no hesitation in giving a consumer guarantee on its products.
According to the Bill, the consumer guarantee will be purely voluntary. However, if manufacturers provided such a guarantee, they would discover that it gave a fillip to sales. People would see the guarantee and believe that the manufacturer was taking pride in his product and had no worries about providing the guarantee. I am also sure that those manufacturers would find that their sales abroad would increase. No manufacturer in his right mind would set up two production lines, one for consumer-guaranteed products and the other labelled, "Shoddy products to go abroad". All goods would come off the same production line and would be built to the same high standard.
If a product carrying a consumer guarantee goes wrong, the manufacturer will hasten to put it right. He will not want to be dragged through the courts because that would not be good for his name. If a manufacturer takes great pride in his product, he will have no hesitation in giving it a consumer guarantee.
The consumer guarantee is of particular relevance to microwave ovens. Schedule II refers directly to those ovens. I noted what the hon. Member for Clwyd, South-West said about the state of his health and what happened when he misused his microwave oven. We are all aware of recent incidents when microwave ovens have not heated food to the required temperature and people have become ill after eating food cooked in them. If a manufacturer provides a consumer guarantee for his microwave oven, that will ensure that the oven heats food to the correct temperature.
Why is the Bill necessary? As I said, all hon. Members receive complaints at their surgeries about shoddy goods. If all goods were well made, no one would complain and there would be no need for the Bill. Unfortunately, all goods—I was about to say that all goods are not well made, but I would have got myself into a proper tangle. I meant to say that many goods are not well made and that is why the Bill is necessary.
It has been claimed that people who are not satisfied with their goods can go to the small claims court. However, people are scared stiff of going to court.If someone buys something that does not do the job that it is designed to do, he wants only to take it back to the shop and to tell the retailer that it does not work. The retailer should then say that he is sorry and give a replacement. That was the point made by my hon. Friend the Member for Portsmouth, South (Mr. Martin).
I am sorry that my hon. Friend has left the Chamber because I am sure that he would be nodding his head furiously if he were present. I was interested to learn that he had a problem with something that he bought from Dixons. My wife told me that it was high time that I brought myself into the 1990s, so last summer I went off to Dixons and bought myself an Amstrad word-processor. The thing arrived and the customary guarantee card fell out of the packaging. I looked at it and then went back to the shop to ask exactly what sort of guarantee was being offered.
It turned out that there were two sorts of guarantee, but I cannot recollect exactly what they were. I filled in a card and paid a fee of about £50, which meant that if that expensive product went wrong, all I had to do was ring up a certain number to ask someone to come to fix it. The thing did go wrong and it turned out to be a problem associated with one of the disks. I rang the given number, and someone came to look at it, but told me that there was a call-out charge of £51. I said that I had already paid £50 so that if it went wrong someone would come to fix it and I asked why on earth I had to pay the call-out charge. I was then told that all I had to do was reclaim the charge under the terms of the guarantee. What a performance.
There was no question of picking up the word-processor and putting it in the back of my car to take it back to Dixons. It comes in three parts and it is rather heavy. Moreover, because of lack of space in my flat, I had not kept the wood shavings and cartons that were used to package the delicate parts of the mechanism. If I had taken it back to Dixons in Victoria street I should have had to park on a double-yellow line and, probably, I would have got a parking ticket or my car would have been towed away. What a lot of fuss.
I filled in the claim form and I sent it off. I received notification from Dixons to say that it could not handle that refund application and that I had to do it through some other channel. That form is now sitting on my desk under piles of paper. Doubtless I shall get round to it some time, but, by then, I shall probably be told that the guarantee is out of date. One cannot win.
The example that I have given demonstrates the need for the Bill. It places no burden on the manufacturer. Should he voluntarily guarantee his products, however, the consumer, on seeing that label, will think, "Marvellous. I have a consumer guarantee." Consumers will be able to buy that product with great confidence and, as a result, the manufacturers' sales will increase at home and abroad. Manufacturers who know that their goods are shoddy will never dare to display a consumer guarantee on their goods. They will find that their sales will drop, so they will either have to update their products or go out of business.
Doubtless my hon. Friend the Minister thinks that I am being far too optimistic and that I am painting a rosy picture.

Mr. Forth: indicated assent.

Mr. Summerson: Well, never mind. I support the principle behind the Bill and if it is given its Second Reading I have no doubt that it will be made even better in Committee. I commend the Bill.

Mr. John Maples: I believe that I am in a minority of one. I do not oppose the Bill, but I am somewhat agnostic about its provisions. I need to be persuaded that it is likely to achieve the effects expected by its sponsors.
The hon. Member for Clwyd, South-West (Mr. Jones) is to be congratulated on picking a subject of undoubted importance to our constituents and ourselves. Everyone who has spoken this morning has identified the problem—that consumers are ripped off and, sold shoddy goods and that retailers and manufacturers do not honour their commitments, either under guarantees or under existing legislation. However, those hon. Members who naively expect the Bill to correct those people who do not honour their obligations have failed to address the central problem—the ability of consumers to enforce their legal rights. My hon. Friend the Member for Walthamstow (Mr. Summerson) is, with the greatest respect, somewhat naive to believe that the Bill will change the behaviour of retailers. They will not take back shoddy goods simply because a consumer guarantee exists. That arrangement will be voluntary and I cannot see how retailers' behaviour will improve as a result.

Mr. Martyn Jones: The point about the Bill is that it will act against the manufacturer. The retailer will not be all that concerned and will be happy to pass the responsibility on to the manufacturer.

Mr. Maples: I accept that, but all the examples cited concern people who have been unable to enforce manufacturers' guarantees. Problems arise with the retailer and the manufacturer and I doubt whether people will be any more likely to achieve their rights under such guarantees as a result of the Bill. I question the assumption that legislation is the right way to deal with the problem. General legal rights are available to everyone. I am not sure that the right solution is to put a rigid framework of guarantees and legislation round contracts for the sale of particular types of goods.
Unscrupulous traders and shoddy goods pose a problem, but competition between manufacturers and traders provide a solution. Part of competition is to be prepared to take back shoddy goods, and we know of good retailers who will do that.
I welcome the Bill's reforms of the Sale of Goods Act 1979, about which I shall speak later, but I do not welcome the guarantee provisions. I am somewhat agnostic about the Bill. I do not believe that it is either wonderful or terrible. I simply need to be persuaded that it will have the effects that are touted for it. I have a general prejudice against legislating when it is not certain that the law will have the desired effect. There is already a great deal of unnecessary legislation on the statute book.
I was and still am a lawyer but I am not about to join in the plethora of special pleading that we have heard from lawyers in this and other debates. When I was studying law the Sale of Goods Act 1893 had to be learned by heart. To follow an established tradition of contributing useless


pieces of information to debates, that Act is usually misnamed. It did not receive Royal Assent until 1894. That is an easy way of winning £1 in a bet with a lawyer, because not many know that.
The Sale of Goods Act 1893, as amended in 1979, provides some good fundamental rules that are legally enforceable. One rule is that goods must be of merchantable quality. That means that the goods should be reasonably fit for the normal purpose, taking into account their price, nature, any description applied to them and any other relevant circumstances. In practical terms that means, for example, that a garden hose should not have a hole in it and the handle of a suitcase should not break the first time it is used. If goods are cheap one should not expect top quality but whatever the price, they should not be faulty. That is a good fundamental legal rule. It is available to everyone who buys something. Admittedly, it is available only against the retailer but it is a legal remedy.
Other rules say that goods must be fit for any particular purpose made known expressly or by implication by the buyer to the seller and that goods must be as described. A leather wallet should not turn out to be made of plastic and furniture that claims to be made of wood should not turn out to be veneered. Those three basic rules are good fundamental consumer protection. They provide remedies that are available to everyone. The difficulty is in using them. The proposal in the Bill to allow the small claims court to be used to enforce guarantees could be extended to allow claims under the Sales of Goods Act 1979 to be enforced there.
The Unfair Contract Terms Act 1977 makes it clear that guarantees can no longer exclude customers' fundamental rights. There was a time when guarantees were used to reduce consumers' rights under the sale of goods legislation and substitute less advantageous rights. Now that cannot be done.
There is a basis in law for consumer protection. It provides remedies, depending on whether one is deemed to have accepted the goods, which allow the consumer either to seek a replacement, his money back, or damages. That is a well-established framework which has been around for some time.
The Law Commission was asked to examine the framework of consumer protection. In 1987 it produced a report in which it recommended some changes, most of which have been included in the Bill. Its main recommendation dealt with the phrase "merchantable quality", which is rather archaic. It recommended substituting the phrase "acceptable quality", while the phrase in the Bill is "satisfactory". The Law Commission also recommended that the concept of acceptance by a consumer should be varied so that the consumer was not deemed to have accepted goods which he had not accepted or not had the opportunity to decide whether he wanted to accept.
The Law Commission recommended against some changes in the Bill. The most important recommendation was against a cure scheme whereby a retailer could be deemed to have cured a defect by putting matters right. The Bill seems to give better protection for consumers than would those provisions. However, the Law Commission suggested that we should not go too far the other way and provide no time limit to the right of consumers to get all

their money back. It stated that a cure scheme would be extremely complicated and that it wanted to keep the procedure simple. Its report came down against those provisions on the grounds that it was not sufficiently confident that that would be more beneficial to buyers and sellers generally than the present law. It feared that such a provision would become a fertile source of dispute and legislation.
On the more pertinent point of no time limit on the right to get one's money back, the Law Commission stated that it did not think there should be a change to the present requirement that a buyer should be deemed to have accepted the goods when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them. The Commission discussed and came down against a new general long-term right to reject a sales transaction. It concluded against the long-term right to reject goods because of latent defects or lack of durability on the grounds that such a right would effectively amount to the same thing as a general long-term right to reject. It then considered replacing the expression "reasonable time' with "a fixed period of time" within which the buyer would retain his right of rejection, but concluded that it could not suggest a better answer than the wording of the present law, given that it applies to every sort of good. However, the report mentions an alternative way forward and suggests that consideration might be given to laws applicable only to specific types of goods, for which fixed time limits would apply. That is an important point and it is one into which the consumer guarantee proposed by the Bill would run. We should bear in mind that the Law Commission considered that point and rejected it.

Mr. Leigh: Does my hon. Friend agree that in discussing the point about "reasonable time", it is important that nothing affects the buyer's right to damages for any defect?

Mr. Maples: My hon. Friend makes that point well. I do not know whether I would have come to it, but I am glad that he reminded the House that the rights under the Sale of Goods Act, to which every consumer has redress, are limited by the statute of limitations and not by an artificial period of, say, six or 12 months.
I understand that the Government are committed to introducing the Law Commission's recommendations. In answer to a parliamentary question, my hon. Friend the Minister said that the Government intend to implement the changes recommended by the Law Commission which will clarify consumers' rights, in particular by replacing the present requirement of "merchantable quality" with a more up-to-date definition. He also said that a new Act would spell out the relevant aspects of determining "satisfactory quality", including fitness for the purpose intended, appearance and finish of the goods, freedom from minor as well as major defects, safety and durability. The Government have announced their intention to introduce legislation to implement those changes to clarify and strengthen consumer rights. My hon. Friend also pointed out that the Law Commission has rejected other proposals. He said that the Law Commission gave careful consideration to all the arguments when it considered the issue, but recommended against the creation of a long-term right of rejection.
The Law Commission argued that such a right would be a major commercial uncertainty that would be extremely unfair to sellers. Consumers who bought a defective product would, in effect, get free use of it until the defect appeared, but the seller would then be obliged to take back the used product and refund the purchase price in full. Suppliers would be obliged to hedge against the commercial uncertainties of such a regime, with unwelcome implications for consumer prices. My hon. Friend said that he wants to avoid that. The important thing is that my hon. Friend has reiterated what the Law Commission has already said.
The National Consumer Council stated in its report that we should create a long-term right of rejection, which is what led to its conclusion that there should be a consumer guarantee, and to the Bill's proposals for such a guarantee but the council did not recommend a change in the Sale of Goods Act 1979 to produce that.
However, the Bill amends the Sale of Goods Act in several ways that were recommended by the Law Commission. Clause 16 is the most pertinent and seeks to replace the phrase "merchantable quality" with "satisfactory quality", which seems more likely to mean something to the average consumer. The clause states:
Goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price… and all the other relevant circumstances.
The clause then lists certain characteristics that should be taken into account in deciding whether the goods meet that definition.
Clauses 17 and 18 implement the Law Commission's recommendations on acceptance and introduce the concept of partial acceptance. The Law Commission was worried about the circumstances in which a buyer could be deemed to have accepted goods when it was unfair to think that he had. Clause 17(6) states:
(6) The buyer is not by virtue of this section deemed to have accepted the goods merely because (for example)—
(a) he asks for, or agrees to, their repair by or under an arrangement with the seller, or
(b) the goods are delivered to another under a sub-sale or other disposition."
He is not deemed to have accepted the goods if he signs the receipt on a delivery note.
Those changes seem to strengthen the basic protection that the law gives to consumers in the Sale of Goods Act 1979. They are good remedies, and I wholly welcome them. They are the result of a commitment that the Government would legislate along the lines recommended by the Law Commission. I do not think that hon. Members will have any difficulty supporting that part of the Bill.
The Law Commission specifically rejected the concept of long-term right of rejection, and at this point I start to have difficulties with the Bill. As I said, it does not lead me to believe that the Bill is wholly wrong, but I need to be persuaded that it is right, or that it is likely to have any effect with the guarantees scheme.
Do we want to go further than the Sale of Goods Act provides? That is a fundamental question. The Sale of Goods Act provides some remedies, but I shall deal with how difficult it is to enforce those remedies. Do we want to introduce more law along the lines of compulsory guarantees?
The Bill allows only one form of guarantee for goods in the schedule. One either has a schedule or one does not. If

one has a guarantee, it is in the form stated in the Bill. In many respects, the Sale of Goods Act gives better rights than do guarantees. We know that most traders and retailers behave reasonably. If one buys something in Marks and Spencer, John Lewis, Sainsburys, or Tesco and it is no good, one can take it back. I have never had any difficulty getting something substituted. Obviously, there are problems, but most respectable retailers realise that it is in their interests to provide a good service. If, by accident, they happen to sell something shoddy, they will replace it. No doubt they go back to the manufacturer who supplied the item and say, "This does not work. We want
another one." That works reasonably well.
The problem lies with a minority of traders, but it affects many consumers. It was identified by the Office of Fair Trading as long ago as 1986, and it is the nub of the problem. The Director General of Fair Trading, Sir Gordon Borfie, said:
Guarantees offered by manufacturers and suppliers can be of great benefit to the consumer, but all too often they are used merely as a marketing ploy or as an additional source of income for the trader. Trading insolvency may leave the consumers with a worthless piece of paper and a guarantee may be used to divert consumers' attention away from their basic legal rights.
He seems to be saying that a guarantee is useful if a manufacturer or retailer honours it. The problem is that companies can go bust or refuse to honour guarantees, or make it difficult for consumers to enforce them. The Bill is unlikely to make any difference to the difficulty of enforcement by the consumer.
The recommendations of the Office of Fair Trading seem to call for a voluntary code of practice on guarantees rather than legislation. The Director General stated:
I will not hesitate to use my powers under the Fair Trading Act and the Consumer Credit Act to take action against individuals or firms who refuse to honour guarantees or who offer guarantees which seriously mislead consumers. IT manufacturers and traders do not bring about improvements voluntarily, I shall consider recommending legislation.
Sir Gordon obviously felt that the best way to deal with the problem would be by voluntary industrywide codes of practice. Some industries have particular problems, and cars are an obvious example. If motor traders were to form an organisation in which they promoted a guarantee which was particularly suitable to cars and, as an industry, police it and make sure that it was enforced, it would be a better system. It would be tailored to meet the needs of the car industry and consumers and would not be imposed by a legislative straitjacket.
In 1988, the National Consumer Council report reiterated some of those considerations and made clear the extent of the problem of many consumers. I was interested in page five of the report, which states:
The Office of Fair Trading estimated that each year 38 per cent. of the adult population is dissatisfied with a purchase they make. This amounts to some 14 million people. A comparable survey by the OFT three years earlier put the figure at 28 per cent.
The OFT estimated… that nearly half of these people will not get the problem resolved.
This means that each year about six million consumers do not obtain redress for unsatisfactory goods. One part of the OFT data that is not questioned is that the dissatisfaction level for cars and household appliances far exceed the level from items purchased regularly, such as food, drink, fuels and toiletries.


From those data it is clear that the Bill, which many of my hon. Friends support, addresses a serious problem. There is no doubt that the information shows that consumers are getting a rough ride in some respects.
The problem, however, is not that the goods do not come with guarantees or that the fine print enables the manufacturer to slip out of its responsibilities, but that the retailer and the manufacturer do not honour their commitments or, as I often find with my constituents, that the shop from which they bought the goods has disappeared, or that the builder who gave them a roof guarantee for 20 years became insolvent and is now trading under another name next door.
This issue is the enforcement of consumer rights and it applies equally to consumer rights in common law. If the consumer found a mechanism that made it easier to enforce his legal rights under the Sale of Goods Act 1979, it would not be necessary for him to worry about enforcing guarantee obligations, too. The problem is that traders do not honour their guarantees. We need a simpler way of enforcing rights under the Sale of Goods Act, just as the Bill proposes that rights under the consumer guarantee should be enforceable in the small claims court. That provision is sensible. If there is to be a guarantee, let it be enforceable in the small claims court. Lawyers could not then run up huge bills and the consumer would be on an equal footing with the supplier and the manufacturer.
That provision could be extended to the remedies under the Sale of Goods Act, although I am aware of difficulties with the level of jurisdiction of the small claims court in the Courts and Legal Services Bill that is currently being considered in another place. I hope that when that Bill comes to Committee we can ensure that the limit is raised to a point that would cover most of the items in schedule 2 of this Bill, although whether it could cover the most expensive cars is debatable.
If enforcement were available in the small claims courts of those new and extended rights that the Bill will give to consumers under the Sale of Goods Act, is it necessary to go further and impose a fairly rigid guarantee? The manufacturer either has to offer this guarantee or no guarantee at all. Consumers will not necessarily gain some rights by being able to enforce the provisions of that guarantee rather than their rights under the Sale of Goods Act. I doubt whether a dishonest or disreputable trader is more likely to honour the consumer guarantee any more than he honours his present obligations under existing guarantees or the Sale of Goods Act.
I want to deal with a point made by the Minister in his reply to an Adjournment debate. After-sales service and guarantees of quality are proper subjects of competition between businesses and proper areas for the exercise of consumer choice. Consumer magazines write up products and say which product is better than another, which provides better after-sales service and which is more reliable. Those are items that consumers should be able to take into account when making their choice between different products. I have no doubt that those characteristics will often, although not always, be reflected in the price of a product. The nature of the guarantee and the reliability of its being honoured are important factors in competition.
If one manufacturer is prepared to offer a two-year guarantee while another will offer only a six-month guarantee, but the six-month guarantee costs £50 less than the two year guarantee, the consumer could choose between them. Extended guarantees cost manufacturers money. The consumer guarantee proposed in the Bill could, in some industries, add considerable costs. The consumer should have the right to choose between paying for the extended guarantee, knowing that he has that comfort, or paying a little less and taking the risk of having to pay for the repairs himself. I question whether it is right to introduce the law into that circumstance.
I am not convinced that there is no room for the law in this arrangement. I have a predilection or prejudice—which is mild at this stage—for allowing the consumer to choose. If there is no guarantee, the consumer can draw his own conclusion. It may be that the product has no guarantee but is well written up in consumer magazines. It may have a terrific reputation. Many of the consumer's friends may have bought it, and he would rather buy it without the guarantee.

Mr. Stern: Does my hon. Friend agree that the idea of having a choice of guarantees would be welcome, especially to those consumers who have been taken for a ride by the offer of guarantees by companies which have then gone out of business? Does my hon. Friend agree that if such extended guarantees were made more generally available, it would be useful to have legislation to ensure that they were independently insured?

Mr. Maples: That would be an attraction that a manufacturer could offer in his guarantee. If he were prepared to insure his guarantee, it would be an added guarantee of the product's liability. No doubt it would cost something to insure the guarantee, but again that should be a subject of consumer choice. The consumer should be able to choose whether to pay a little extra and have the insured guarantee. In certain circumstances, I would welcome that offer and choose it.
I have some difficulty about the guarantee scheme outlined in the Bill. It imposes a uniform guarantee—one either has this guarantee or no guarantee at all. It results from the National Consumer Council report. I have quoted the comments of my hon. Friend the Minister that, in the Government's view, it goes too far. In another debate, my hon. Friend said:
I agree that guarantees should state their terms clearly and in plain English and I could support legislation that would make such guarantees legally enforceable. I fully endorse the view that any guarantee must be additional to existing statutory protection.
But I do not accept that it is necessary to lay down detailed terms or procedures which would attach to specific products covered by consumer guarantees.
The Sale of Goods Act provides the consumer with a clear right of action against the supplier, who is normally a retailer. The NCC proposals would involve the manufacturer, who is not normally a party to the contract.—[Official Report, 14 December 1989; Vol. 163, c. 1302.] I do not want to go into that last point, but those comments sum up the case against such a scheme.
The objectives set out by the hon. Member for Clwyd, South-West and the NCC are not likely to be achieved by the Bill. The hon. Gentleman described his three objectives in a press release and later in an article:
"(a) to give consumers a clear and simple indication of the quality and especially the reliability of products;


(b) to promote high standards of quality control; and
(c) to seek fuller competition."
I should have thought that the hon. Gentleman was unlikely to achieve any of those objectives through the Bill. It is unlikely to promote high standards of quality control. It certainly will not achieve greater competition—if anything, it is likely to achieve less, because all guarantees will he the same. It will give consumers a clear and simple indication of their rights, but not of the quality or reliability of products. The fact that a product has a consumer guarantee no more guarantees the product's reliability than do existing guarantees.

Mr. Martyn Jones: I thank the hon. Gentleman for giving way again. I wanted to put him straight on one matter. The point is not that this guarantee will replace all other guarantees. That is arrant nonsense. It will give a minimum level of guarantee and replacement or refund provisions will be enshrined in law.

Mr. Maples: I understand that point. I certainly did not mean to give the impression that the guarantee in the Bill had some other effect.
The NCC's report describes one of the objectives slightly differently. It referred to the aim
to provide consumers with a clear and simple indication of their rights of redress".
That is an objective to be welcomed—consumers should understand exactly what kind of guarantee they have and what their rights are. I would have no problem in supporting that objective.
The NCC goes on to argue that this will help to promote competition, but I have doubts about that. The Bill will not make it easier to enforce guarantees. Consumers cannot enforce their rights under the Sale of Goods Act or their guarantees legally, and the Bill will not make it easier to do so. The exact form of guarantee is where I begin to have difficulties with the hon. Gentleman's Bill. A guarantor would have to repair any defects in a product, free of charge, although the obligation would not arise if the defect had been caused by misuse of the product. That would apply regardless of the time that had elapsed. The guarantor must provide the consumer with the use of a comparable replacement product free of charge, or must reimburse the consumer for any expenses that he incurred as a consequence of losing the use of the product, if the guarantor does not repair it within four relevant days.
If in any 12-month period—however late in the 12 months—the product is unrepaired for more than 21 days, a full refund or replacement must be offered. All those remedies must be provided free of charge within 12 months of purchase.
Those obligations are likely to lead to increased costs and a diminution of consumer choice between different forms of guarantee and are unlikely to be suitable for every type of consumer product to which they are intended to apply. We would be imposing one scheme on all products.
One criticism is that we would create a long-term right of rejection that would apply even if the defect were only minor, which would effectively give consumers free use of goods until unsatisfactory repair work triggered the right to a refund. The Law Commission in its review recommended that there should be no long-term right of rejection, as it would be unfair to sellers and would entitle

consumers to full refunds for used goods, thereby creating major commercial uncertainties with adverse effects on prices. I think that is fair and trenchant criticism.
Other criticisms are that the Bill would create practical, administrative and bureaucratic difficulties for businesses, which would have to keep a history of the goods that they have sold. It would be anti-competitive, which is a point that I have made. It reverses the burden of proof because, although the supplier or manufacturer is not obliged to repair defects that are not his fault, effectively the burden of proof is on his shoulders.
There would be practical difficulties with the provision of loan goods. Perhaps that would not occur with an Amstrad computer, a video recorder of a compact disc player but it would be extremely unreasonable to expect a supplier to keep a stock of expensive motor cars on hand as temporary loan replacements to unhappy consumers.
A couple of other criticisms have been made of the Bill, and I should be interested to hear what my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs has to say about them. One is the impact of the Bill on credit agreements, which my hon. Friend the Member for Hornchurch (Mr. Squire) mentioned in his speech. The second is the EC implications of the measure, because many consumer protection requirements and regulations will have to apply throughout the EC. I understand that the Commission is considering the issue at the moment. I shall be interested to know whether this will make life difficult for us in the future.

Mr. John Marshall: My hon. Friend said that if we pass such a measure it may be regarded as being in restraint of intra-Community trade. Does he believe that we might be taken to the European Court and would that not be bad for Britain's reputation.

Mr. Maples: My hon. Friend knows more about the activities of the European Commission than I do. I understand that that is the nub of the problem. I have no objection to Europeanwide standards of consumer protection, and health and safety protection, and we do not want to get out of line. That would give rise to the consequences that my hon. Friend suggested, and we should not let ourselves in for that lightly.
I welcome in clause 14 the introduction of the small claims courts procedure for dealing with claims under guarantees. I suggest to my hon. Friend that he should extend the small claims courts' jurisdiction to actions under the Sale of Goods Act 1979 by consumers for the type of goods set out in the schedule, although that may create difficulties in the case of expensive cars.
To sum up my argument, substantial remedies are already available under the Sale of Goods Act 1979. The amendments proposed to strengthen those remedies and the consumer guarantee proposed by the Bill do not add to them and they will certainly incur costs. I am not at all sure that those costs do not outweigh the benefits of the guarantee. I welcome the provisions covering labelling, clarity and the small claims enforcement procedure, but I am concerned about the competition and expense implications of imposing a guarantee straitjacket on all these goods.
The central problem concerning consumer rights is not so much the nature of the rights but the difficulty of enforcing them. If we could encourage voluntary, industrywide schemes that gained credibility with


consumers, and if we could extend the small claims procedure to the Sale of Goods Act, we should go a long way towards meeting the promoter's objectives. I am not at all sure that the consumer guarantee provisions meet their stated objectives. It is also possible that the costs and other implications outweigh the benefits.

Mr. Ron Davies: On a point of order, Mr. Deputy Speaker. You were not in the Chair for the private notice question; Mr. Speaker was. Three quarters of an hour of the time that had been allocated to the Bill promoted by my hon. Friend the Member for Clwyd, South-West (Mr. Jones) was taken up by the private notice question. Mr. Speaker made a pointed reference to the fact that time had been lost, and appealed to all hon. Members to speak briefly. The hon. Member for Lewisham, West (Mr. Maples) was entitled to speak, but he has spoken for over half an hour. Previous speakers made brief speeches since a number of my hon. Friends want to make a contribution to the debate—

Mr. Deputy Speaker (Mr. Harold Walker): Order. I understand the hon. Gentleman's point. I believe that Mr. Speaker appealed for brief speeches, since time was lost due to the private notice question at 11 o'clock. I hope that hon. Members will bear Mr. Speaker's appeal in mind.

Mr. Roger Gale: I hope, Mr. Deputy Speaker, that I shall be commendably brief. There has been a considerable consensus, and I know that all hon. Members are waiting to hear the response of my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs.
I congratulate the hon. Member for Clwyd, South-West (Mr. Jones) and I thank him for his courtesy in inviting me to be one of the sponsors of his Bill, which has my fullest support. I hope that it will swiftly find its way on to the statute book.
The Minister has a reputation for being extremely robust when defending and promoting free trade. Normally I agree with him. I am therefore a little disappointed that, on the radio this morning, I heard him say that he does not consider that the Bill would promote competition and trade. I believe that it will. To take the Minister back a few months, he will remember his first appearance at the Dispatch Box. He will recall that he said that his duty—not a labour of love—was to seek to implement a miserable European directive that abolished the country of origin marking on goods. He most certainly did his duty formidably, as he always does, but I do not believe that his support for that measure was any greater than mine. His heart was not in it.
The Minister has an opportunity today to undo a little of the damage that was done on that occasion and to lend his support to a measure that will lead to the return of a little and much needed bit of consumer protection.
I speak unashamedly on behalf of my constituents in general and of two categories in particular—the first-time buyer, the home maker, and those who are about to retire. I have many of both categories of constituents. I am thinking in particular of the young married couple who are setting up home for the first time and buying their first

washing machine, cooker, record player, video and car. I am also thinking of the last-time buyer—those who are trading down and moving to the home where they expect to end their days and who, perhaps for the last time in their lives, are buying new and quite expensive goods on very limited incomes: their last car, cooker and all the other items that I have mentioned. They are entitled to the best of everything when they buy new goods.
My hon. Friend the Member for Spelthorne (Mr. Wilshire) said that those people have rights, but they do not want the right to go to a solicitor or a small claims court. They do not want the right to have something repaired or to have a new car with a second-hand or replacement gearbox. They bought a new car. That is what they paid for and that is what they want. It is that simple.
I buy British whenever I can, and I do not believe that any British manufacturer has anything to fear from the Bill—far from it. I believe that the Bill will stimulate competition and increase confidence, especially in British goods. People will know that they are not buying second best from Italy or Taiwan but the best, which is made in Britain and which says so because it is guaranteed. If we put this measure on the statute book, we shall have given the consumer something that many consumers believe they already have and most certainly want. I hope that the Minister will find it in is heart to see the merit of that and to support it.

Mr. Michael Stern: I join two other hon. Members in apologising to the House for the fact that the British winter is having its usual effect on my voice.
With my hon. Friend the Member for Lewisham, West (Mr. Maples), I am in a minority because I have considerable doubts about the Bill, although I welcome much of it. I congratulate the hon. Member for Clwyd, South-West (Mr. Jones) on introducing the Bill and on enabling us to highlight a number of areas of obvious public concern which carry a great deal of public support. In fairness to him, I should deal first with those aspects of the Bill with which I am a little unhappy.
When I started training in accountancy at the age of 16 as an articled clerk—what a pity it is that that phrase has now disappeared from the English language—one of the first principles of English law I learned was "caveat emptor"—let the buyer beware. However much we desire to protect the interests of the consumer, and however much we recognise that the consumer is so often fighting an unequal battle against the large corporation—the business that does not care because it is simply looking for market share and is not concerned about repeat orders—we must be very wary about inculcating into the consumer the idea that he need have no care, that, provided that he buys from a recognised manufacturer or retailer and provided that the packaging looks nice, he has no further duty to take care and consider his assets and his rights.
My first worry is that a basic guarantee as proposed by the hon. Member for Clwyd, South-West would mean nannying the consumer just a little too much. I would urge caution in setting up such a guarantee and relieving the consumer of the power and duty of perception.

Mr. Summerson: If someone were to buy a house, if he were prudent he would get a chartered surveyor to look at


the house. Obviously a house is a large object and can be looked at by an expert. Does my hon. Friend agree that, if a consumer goes out to buy a video, for example, he cannot really get an expert to look over the product and give him an assurance that it is good enough for his purposes?

Mr. Stern: I entirely accept that. I am not trying to state an absolute principle that only the seller needs protection: I am saying that we must avoid legislation that might persuade consumers that they can afford to be careless.
My second worry is that the Bill seeks to interfere in the basic right of a seller and purchaser to enter into a contract. We should be wary of interfering in that right. It is basic to the Bill that, when a consumer buys goods he obtains rights against not only the retailer but the manufacturer, which is not aware who is buying its product, under what conditions and when.
I should like to instance the recent Monopolies and Mergers Commission report into credit card trading. It was news to me that, for many years, the high street banks had been secretly interfering in every contract between myself and the retailer from which I purchased, by saying that under civil law it is illegal for the retailer to make a different charge for goods depending on whether I used a credit card, which cost the retailer more, or cash. I strongly reject the principle that the high street banks had any right to interfere in a private contract, and I am delighted that the Government have decided to remove that right.

Mr. Gerald BowdenM: Does my hon. Friend accept that it is an established principle of English law, whether or not there is a contract between the manufacturer and ultimate user, that if, through negligence, a manufacturer produces goods that are so deficient and defective that they cause injury to the ultimate user, the manufacturer is liable? Should not a manufacturer, which knows how the goods are manufactured and has the technical knowledge to certify them, have a similar liability, whatever the chain of contract between it and the ultimate user?

Mr. Stern: I entirely accept my hon. Friend's point. I am not trying to deal in absolutes, but one must consider the principles on both sides. A manufacturer whose goods are designed to be sold in certain circumstances and conditions may find that a retailer is selling them under different circumstances and conditions, yet under the Bill the manufacturer would be at least in some danger of being liable.
My third worry is about the right of rejection, about which my hon. Friend the Member for Lewisham, West expressed some doubt. We are all aware of circumstances in which the right of rejection should apply. A constituent of mine, Mr. Ken Evans, has written to the hon. Member for Clwyd, South-West (Mr. Jones)—I shall refer to Mr. Evans later—about a car that he purchased. It was in such an appalling condition that any reasonable person would have said that it should be taken off the road straight away and should never be driven by anyone, let alone such a pertinacious gentleman as Mr. Evans.
Nevertheless, some consumers would use the right of rejection to obtain goods on free permanent loan. They would return to the retailer about every three months with a marginal defect which might have arisen from use or manufacture and in many cases obtain a new product because the retailer would have his reputation to consider. The long-term right of rejection has been questioned by

the Law Commission, and many people have considerable doubts about it. For those reasons, I shall not support the Bill.
Let me deal briefly with the respects in which I believe the hon. Gentleman is entirely right—as witness the organisations and people who have attacked the Bill. I do not have a substantial motor manufacturer in my constituency but like anyone who has bought a lemon car at any time in his life, I can say that in principle any Bill attacked by the Society of Motor Manufacturers and Traders must have something good about it.
The reasons that the society has given for opposing the Bill suggest that the Bill may be necessary. The society refers to the problem of minor defects and suggests that it does not believe that a minor defect such as an intermittent fault in an interior light should allow the consumer to claim a refund or replacement. Taken out of context, one cannot argue with that statement, but we have all either purchased, or know people who have purchased, motor vehicles in which there has been not one minor defect but a different minor defect every day.
There are brands of car, regrettably manufactured in this country, which one knew one was buying for style and performance but certainly not for reliability. One knew that, every time one took the car in for a service, one would have to list not just the requirements of the service but 27 other faults that had to be put right. I accept the implication in the Bill that even minor defects can build up to the extent where there should be a right of rejection.
The purchaser of a particularly complex item should have the right to say to the retailer, and ultimately to the manufacturer; "This product is so bad that you should take it back and study it to find out why it went wrong." On a smaller scale, the personal stereo that I usually carry with me when I travel went wrong and the manufacturer had more use out of it than I did in the first year of my ownership, although admittedly, the manufacturer has the reputation of never repairing a product in under six weeks.
The right of rejection and it importation into law is necessary. My worry is that we have not yet reached the stage of research into consumer law at which we can lay down the circumstances in which that right should and should not apply.
As the Society of Motor Manufacturers and Traders rightly pointed out, the option of replacement or refund in the Bill gives rise to particular problems, especially with new cars. Many newly introduced cars are available only to those on a waiting list. When such a car is purchased and found to be defective, it would be wholly unreasonable to give the consumer the right to demand its replacement with an identical car. The only practicable remedy available to the motor trader to give in those circumstances is the right of full refund because he cannot get a replacement anyway and, even if he could, several other people would be waiting for it.
We have already referred to the fact that the society has offered help to draw up another Bill. I hope that, if the Bill goes into Committee, an amendment will be made to take into account not just the views of the manufacturers of expensive consumer goods such as motor cars but the views of a broad spectrum of experience of individual consumers such as Mr. Evans, who wrote to the promoter of the Bill. Those views would help us to arrive at a decision on what rights should be legally enforceable under the guarantees.
The British Radio and Electronic Equipment Manufacturers Association has also attacked the Bill, for somewhat specious reasons. It has said that it is generally the dealer who provides the repair service to the public. I suspect that any dealer in electronic goods who saw such a statement would immediately sue the manufacturers for libel. As we all know, the people who repair electronic goods that have to be sent away to be repaired cloak themselves in anonymity because they know of their reputation with the public. The poor dealer is usually the idiot who bears the opprobrium of the public for delays in servicing and for unsatisfactory servicing, when he is merely acting as a post office and sending goods away to the usually inadequate servicing facilities which are laid on by the manufacturer.
The hon. Member for Clwyd, South-West has received a detailed communication on the Bill from Mr. Evans, a constituent of mine. I should explain that Mr. Evans is indefatigable in his pursuit of the rights of the consumer, for reasons that are based at least in part on his own experiences. He has gained a reputation locally as a person who never gives up. Frankly, his experiences with a couple of motor cars that he purchased have convinced me that it is in every way right and proper for him to act in that way. I praise his pertinacity and wish that more consumers would show the same quality.
Mr. Evans has suggested—I believe that the suggestion has considerable merit—that, rather than proposing an enforceable guarantee which would be available to every consumer, we should examine the current powers and duties of trading standards officers, and should perhaps extend their statutory powers so that they would have the opportunity, the obligation and the resources to enable them to take up, on behalf of the consumer, the problems that the Bill is designed to redress.
If the hon. Member for Clywd, South-West were to pursue that line, it would be necessary to make the trading standards service a national rather than a county-based organisation, or perhaps a national organisation with county branches. It is possible that my constituent's proposal, which I commend for consideration at least, would enable us to avoid some of the undoubted legal problems which have been described this morning and which are implicit in the Bill. Mr. Evans's suggestion would also give rather more power to the consumer in arguments with large manufacturers.
I congratulate the hon. Member for Clywd, South-West on bringing this measure forward. I cannot support him, but I hope that there is a fair chance of the Bill going into Committee.

Mr. Edward Leigh: I know that my hon. Friend the Minister is anxious to speak soon, so I shall restrict my comments to six or seven minutes, which will enable the House to come to a decision on the Bill.
We have heard much today about the Sale of Goods Act 1979. It is true that the Act looks rather frayed at the edges, although it has served the country well. I was pleased by the recommendation of the Law Commission that the phrase "merchantable quality" should be changed. When I was a law student, I always had grave

difficulty in understanding what the phrase meant, but I was too shy to ask my teachers. If I was too shy, I fear that the public may be even more so, and may be confused. The phrase rings of the grand Victorian days when British goods sailed the world. Phrases such as "satisfactory quality" or "acceptable quality" would be much better.
Notwithstanding the fact that the Sale of Goods Act 1979 is looking a little frayed at the edges, I am sure that we can still address these problems of consumer protection. We are all consumers and we all want to protect consumers. I am not yet convinced that the complex problems cannot be addressed simply by amending the Sale of Goods Act. Although I shall not oppose the Bill's Second Reading, I am not sure whether it will solve all the problems.
From a legal point of view, the beauty of the Sale of Goods Act is that it is easily understood. The consumer understands that he has a right of rejection, but he must exercise that right within a reasonable time. That concept, albeit enshrined in statute law, goes back to common law times and is based on sound common sense.
My hon. Friend the Member for Bristol, North-West (Mr. Stern) made a fair point. He said that goods are much more complex in this modern era, so it may take some time for a defect to become apparent. Indeed, several defects might build up. In that case, is it fair to require a consumer to exercise his right of rejection within the reasonable time aspect of the Sale of Goods Act? That is one of the soundest legal points that I have heard today. I am not sure how that problem can be addressed in amending the 1979 Act, but I do not see why we should throw over the 1979 Act and adopt the proposals in this Bill.
As I said earlier, although the provisions in the Sale of Goods Act are easily understood by the public, nothing in the Act affects the right of the public to damages, and that is important. Similarly, nothing affects the rights of the consumer under various guarantees. The public must be aware that, if guarantees are given, they in no way remove rights under the Sale of Goods Act.
Self-regulation by manufacturers has achieved a great deal and many of the proposals in the Bill are already enshrined in codes or practices. I am not saying that it would not be useful to enshrine codes of practice in law, but we should not assume that much has not already been achieved.
I understand that my hon. Friend the Under-Secretary of State for Industry and Consumer Affairs is worried about the long-term right of rejection, which is the fatal logical flaw in the Bill. I do not believe that my hon. Friend the Minister was right to say that the Bill would be unnecessarily bureaucratic and restrictive. I hope that he will refer to that later, because I believe that he is not on sure ground there. I have tried to explain as simply as I can that the Sale of Goods Act is so clear that the Consumer Guarantees Bill, if enacted, might confuse the public.
My hon. Friend the Member for Bristol, North-West referred to minor defects—a point that was also made by the motor manufacturers. Perhaps we should not place too much credence on what the motor manufacturers say. However, perhaps my hon. Friend the Minister can tell us what happens if a car's interior light does not work. Under the Bill, would someone have the right to reject the whole car? That may be a philosophical point, but it is of interest.
When my hon. Friend the Minister describes the Bill as unduly bureaucratic, perhaps he is thinking of guarantors needing to monitor repair histories of individual products


to protect their interests. Any trends towards liberalisation of servicing might be set back by that. That is a fair point, and I hope that the Minister will refer to it.
I promised that I would sit down before 1.15 pm, so I shall conclude by saying that I am extremely worried about the reversal of burden of proof. We lawyers take that extremely seriously in the criminal and civil courts. I am not entirely convinced that we should proceed as far as the Bill suggests. Although the guarantor is not obliged to repair defects that are not his fault, proving so is an onerous burden on him. This is particularly serious as such radical remedies create an incentive for potential consumers abuse.
I am not suggesting that the Bill is not courageous; nor am I suggesting that it was wrong to introduce it. I believe, however, that we must consider it carefully in Committee.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth): I begin by joining in the congratulations that have been offered by hon. Members, including many of my hon. Friends, to the hon. Member for Clwyd, South-West (Mr. Jones) on achieving the number one position in the private Members' ballot. That is a much coveted position each year and it occupies an important place in the parliamentary calendar.
I thank the hon. Gentleman for taking the trouble to see me early on in his considerations of this matter and for the discussions that we had. I hope that he agrees that they were friendly and constructive and I hope that we made each other's position clear. I made it clear to the hon. Gentleman that were he to proceed to amend the Sale of Goods Act 1979 he would have Government support and help. I made it equally clear, however, that I had serious reservations about the guarantee proposals in the National Consumer Council report, and I told him that if he proceeded with those proposals, the Government would have to express their reservations.

Mr. John Marshall: My hon. Friend is giving us an interesting insight into his thought process. I congratulate him on the statesmanlike approach that he has adopted towards the hon. Member for Clwyd, South-West (Mr. Jones). My hon. Friend made it clear that he would not object automatically to the proposed Bill.

Mr. Forth: I am grateful to my hon. Friend.
I have given the background to the Bill because I wanted to make two things clear. The first is that from the start I have been prepared to be as helpful and open as I can. I hope that my hon. Friends will agree that that was the right position to adopt. The second is that it would be equally fair to the hon. Gentleman, however, to make it clear to him that were he to proceed down a certain route the Government would, inevitably, have some reservations about his Bill.
Another factor that has permeated our proceedings today gives a clue to the strength of my reservations. Speaker after speaker, including the promoter of the Bill, the hon. Member for Truro (Mr. Taylor), and my hon. Friends the Members for Dulwich (Mr. Bowden), for Portsmouth, South (Mr. Martin) and for Newark (Mr. Alexander), said that they liked the Bill, but that it was seriously flawed. They said, "It does not do quite the right thing, but never mind, it can be amended in Committee."
That is a worrying attitude to adopt when setting out to introduce legislation. It is especially worrying when a Bill has received such little detailed consideration at this stage of its proceedings that even its supporters admit that it will require considerable amendment in Committee.
The truth is that we have no means of knowing, even remotely, at this stage, in what form the Bill will emerge from Committee. Some people want to strengthen it and others want to include other bits and pieces. That is all understandable, but it makes the process unpredictable and that is not the ideal way in which to legislate.

Mr. Robert Maclennan: I am grateful to the Minister for giving way, particularly as I have not participated directly in the debate, but I heard the speeches to which he referred. He did not characterise those speeches fairly when he said that those hon. Members said that the Bill was fundamentally flawed. Hon. Members, including the hon. Member for Dulwich (Mr. Bowden), were calling for matters of detail to be considered in Committee, but they did not call into question the principle of the Bill.

Mr. Forth: Our examination of Hansard will demonstrate where the emphasis lies. The House may want to bear in mind the fact that many hon. Members who were ostensibly in support of the measure felt obliged to express reservations about it. That seems an odd way to embark upon legislation.
To set in context the Government's view of the Bill I shall quote, as I often like to do on these occasions, the Department of Trade and Industry White Paper published in January 1988 which remains our bible and guiding philosophy. We said of the Government's approach:
In consumer protection the policy emphasis will reflect the Government's view that the best form of protection comes from consumers making well informed choices and acting in their own interests. To achieve this, information can be more effective than regulations. However where the case is made out for regulation on safety or other grounds, the Government will not hesitate to act.
Recent history has demonstrated that that is true. It is the correct, responsible and balanced approach to the matter and it will guide us in our response to the Bill. A balance must be struck between what regulations can offer and what the market place can offer through the power of the consumer.
Several hon. Members referred to the Law Commissions' review of consumer protection. I shall do so in more detail because it will be of help to the House. Hon. Members who are lawyers, solicitors or barristers and are familiar with the legislation will realise that what the Law Commissions say is vital to our understanding of the Bill. That has been said, before, but I wish to make sure that the House is aware of it.
In 1987 the Law Commission and the Scottish Law Commission completed a review of certain aspects of the law governing the sale and supply of goods. They examined the present statutory provisions for implied terms in contracts for sale, the remedies for breach of those terms and the present rules governing the loss of right to reject non-comforming goods. My hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) referred to that a moment ago. One can imagine the depth and thoroughness with which they examined the subject if I tell hon. Members that the deliberations were under way for some eight years, before publication of a comprehensive report which runs to over 100 pages. The list of people


and organisations who submitted comments on the Commissions' working paper runs to over 100 entries and covers, among others, representatives of industry and commerce, manufacturers, retailers, finance houses, consumer bodies and lawyers. That gave rise to the Law Commissions' recommendations which were published in May 1987.
The main change that was recommended, to which several Members referred, was to replace the present implied term "merchantable quality"—the phrase which gave my hon. Friend the Member for Gainsborough and Horncastle such trouble when he was studying law—with an up-to-date term that recognises the aspects of quality that are important for consumers as end users of the goods in question. The hon. Member for Clwyd, South-West emphasised that.
The amended Act would state explicitly that the relevant aspects in determining acceptable or—this would probably be preferable—satisfactory quality include fitness for purpose, the appearance and finish of the goods, their freedom from minor as well as major defects and their safety and durability.
The Law Commissions also considered the present rules governing acceptance and rejection. However, they proposed that no change be made to the customer's right to reject non-conforming goods. I have no doubt that they gave very careful consideration to all the arguments surrounding this issue. Their report comments that this issue attracted considerable comment during consultation and that their conclusion was generally—although not universally—supported. They recommended—this is crucial to the debate—against creating a long-term right of rejection. They considered that such a right would create major commercial uncertainties and would be extremely unfair to sellers.
The Law Commissions also recommended several other minor changes to the Sale of Goods Act 1979. I shall not mention them all today, but I draw particular attention to their recommendation for extension of some of the provisions of the Supply of Goods and Services Act 1982 to Scotland. The situation has never been completely clear regarding the rights of consumers in Scotland when goods are hired, acquired as part of a trade-in, or received as a commercial gift. This extension would make it absolutely clear that consumers in Scotland who receive faulty goods in such circumstances would have exactly the same rights as though it had been a cash sale. As such, the proposed reform has the full backing of the Scottish Consumer Council.
The Government have announced their support for the Law Commissions' recommendations and their intention to introduce legislation to implement the recommendations, subject to some minor clarifying amendments. The amended Act will set a high standard for the quality which the consumer is entitled to expect, and will clarify and strengthen consumers' rights. These provisions are reflected in part V of the Bill and I thank the hon. Member for Clwyd, South-West for that because it is a major step forward.
The subject of guarantees forms the bulk of the hon. Gentleman's Bill, which is probably one of the most substantial private Member's Bills to have been laid before the House for some time. That fact must also give us cause

to wonder how it would fare in Committee because difficulties always arise when the House sets out to consider a Bill of substance and complexity in a private Member's Bill Committee. That is another source of my reservations. Nevertheless, the subject of guarantees has been scrutinised considerably over the years by the Office of Fair Trading and recently by the National Consumer Council, whose report gave rise to the Bill.
I turn now to a detailed consideration of the proposed legislation, especially in relation to guarantees, on which the bulk of the debate has concentrated. There is much common ground among all hon. Members who have contributed to the debate about the sale of goods part of the Bill, so I need not dwell on it at any length. However, it is right to consider the guarantee provisions in detail.
The Bill seeks to create the provison in law for a consumer guarantee. The essence of the proposed approach, as we see it, is to provide additional remedies against the guarantor, which would be enforceable in law. The measure would provide for rights to free repair of all defects and in some circumstances to refunds or replacements. The remedies would be against the manufacturer rather than the retailer, as under the Sale of Goods Act 1979. The Bill sets out a list of minimum terms—a prescription in fact—for a consumer guarantee. Although the offer of the guarantee would not be mandatory, consumer durables within certain categories would be required to carry a prominent indication of whether they are covered by a consumer guarantee. That might create some burdens and difficulties that have not been fully anticipated.
The supporters of the Bill have argued that it will strengthen consumers' protection against shoddy goods, that when disputes arise it will clarify the position to the benefit of both consumers and suppliers, that it will lead to improved quality control—a point stressed by the promoter of the Bill—and that it will stimulate competition between manufacturers on quality grounds. Of course, I support the objectives of such a proposal and share anyone's commitment to transparency of information for consumers, to improved product quality, and to free and full competition between producers. Few—and certainly not I—would argue with those objectives.
Nor would I dispute that guarantees are a subject that might merit further examination. It has been argued that the law is at present unclear about the exact status of a guarantee and whether it confers rights that are enforceable in law. The report published by the Office of Fair Trading in 1986 draws attention to a number of other practical aspects of the operation and enforcement of guarantees offered to consumers, which merit further consideration in the light of developments even since the publication of that report.
That much is common ground. I have indicated throughout to the hon. Member for Clwyd, South-West that I believe that the whole area of guarantees merits further examination. We differ on whether either the National Consumer Council report or the Bill is the correct way to proceed and that is a legitimate area of difference between us. For that reason, I am sceptical about the proposed approach for consumer guarantees. I doubt whether the Bill will provide the benefits that its advocates and supporters have put before us. It is easy to be attracted to it because it sounds good. Reference has already been made to the MORI poll in which people were,


in essence, asked, "Do you approve of motherhood and apple pie, if not of guarantees?" Surprise, surprise—a lot of people said, "Yes, we do."

Mr. Bob Cryer: Has the Minister no heart?

Mr. Forth: For the benefit of the hon. Member for Bradford, South (Mr. Cryer), I think that I implied, if not said, that I rather approve of motherhood.
The thought occurred to me that if we are to determine policy based on opinion poll surveys, and Opposition Members are saying, that there is such enormous support for consumer guarantees, they would presumably agree that we should reintroduce capital punishment on exactly the same basis. If I can produce a MORI opinion poll that demonstrates overwhelming support for the reintroduction of capital punishment, to be logical and consistent, Opposition Members should say that we should legislate accordingly. I do not see any takers.

Mr. John Marshall: My hon. Friend the Minister referred to opinion polls. Obviously, in opinion polls, someone must answer yes or no. They often say yes, but they do not feel particularly strongly about the issue. How many people have written to my hon. Friend the Minister asking him to support the Bill? That would give an indication of positive support for it.

Mr. Forth: I do not have an exact number for my hon. Friend.

Mr. Barry Jones: Oh!

Mr. Forth: The hon. Gentleman should not get too excited. Let him contain himself. If I have time, I will give my hon. Friend the Member for Hendon, South, (Mr. Marshall) some details of those who have said that they have reservations about the measure. Many claims have been made about it. My hon. Friend put his finger on an important point. It is easy to ask, "Do you think that better guarantees are a good idea?" Most people will say yes. The best way to ask the question is, "Do you believe that measures of this kind will be desirable, given the effects that they may have on increased prices, for example? The next question should be, "Would you be prepared to balance possible benefits of the extension of guarantees against a probable increase in prices?"

Mr. Allan Rogers: The Minister's discourse is extremely interesting, but it is quite time-wasting. Will he refer to the intrinsic matters of the Bill rather than the merits or otherwise of public opinion polls?

Mr. Forth: The hon. Member for Rhondda (Mr. Rogers) must not tempt me. He drifted into the Chamber a few minutes ago, is obviously anxious to get away, and has tried to suggest that I should skip quickly over the arguments on this important measure.

Mr. Rogers: Discuss the arguments.

Mr. Forth: I ask the hon. Gentleman to stop interrupting from a sedentary position. I am anxious to get on to the arguments.

Mr. Leigh: My hon. Friend the Minister mentioned questions that may not be covered in a simple opinion poll. One matter which is germane to our discussion is that, under the United Kingdom approach, only parties to a contract may enforce it. If, under the Bill, a consumer is

allowed to enforce a contract against a manufacturer with whom he may not have a direct contractual relationship, it could lead to complex disputes involving, perhaps, finance houses, retailers, manufacturers and consumers. That problem is not addressed in simple opinion polls.

Mr. Forth: I am grateful to my hon. Friend. I had hoped to refer to that matter in a moment, but my hon. Friend has already done it for me, and much more elegantly.

Mr. Alan Williams: The Minister is mounting a substantial part of his case upon a fictitious opinion poll that asked whether people are in favour of guarantees. He is now enjoying himself deriding that opinion poll, but that is not what was asked. What he has been saying until now is irrelevant. The NCC report referred to questions about the need for information on reliability and durability of certain products. The term "life expectancy" was used. There were questions about assessment of the way in which that information is currently provided. That is very different from the simplistic opinion poll that the Minister has just demolished. Perhaps he will now address the Bill.

Mr. Forth: I am anxious to continue with that—perhaps now I will be given the chance.

Mr. Brian Sedgemore: When I used to be a civil servant and a private secretary to a Minister, it was usual for Ministers, when they commented on documents, opinion poll surveys and information provided by the National Consumer Council or the Consumers Association, to read the information and then to give informed comment to the House instead of filibustering at the Dispatch Box.

Mr. Forth: The hon. Gentleman observes that in my hand I have the MORI opinion poll referred to by the right hon. Member for Swansea, West (Mr. Williams). It has been at my side throughout the debate. 1 have refreshed my memory of its contents at times during the debate and feel entitled to comment on it. If the hon. Gentleman would like a copy, I should be happy to let him have one after the debate, whenever that may be. I am being hampered in making progress by Opposition Members who seem determined to slow the pace of the debate. I cannot understand why they should do so, but no doubt the reason will emerge at some stage.
I shall now deal with the points of my hon. Friend the Member for Gainsborough and Horncastle, to which I have not yet been able to respond. His comments went to the heart of the matter. One danger of the Bill is that it might interfere with the delicate relationship between consumers, manufacturers, retailers and the providers of finance—a point made ably by my hon. Friend the Member for Hornchurch (Mr. Squire) who, due to indisposition, has offered his apologies for leaving the debate. He made some telling points to which I shall return if I am given the opportunity, about the relationship between the financial institutions—through hire purchase and leasing—and consumers. That point is crucial. My hon. Friend suggested that it may be a fundamental flaw in the Bill, and I am inclined to agree. That may not be resolved adequately in Committee. I am worried at the glib assertions that if only we give the Bill a Second Reading, we can resolve everything in Committee. That is not the correct way to proceed in this case.
The core of the matter—in addition to what I have just said—is the long-term right to reject. That has been considered carefully by the Law Commissions and, after much serious consideration, they set it aside. The consumer guarantee within the Bill, including a compulsory provision for the remedy of refund or replacement at the election of the buyer, would create a long-term right of rejection that would apply even if the defect that triggered the remedy was only a minor one. The attempts to meet the inherent problems in this long-term refund or replacement remedy give rise to many of the complexities in the Bill and the burdens to which I referred before this debate, which a number of hon. Members have queried to
day.
I remind all hon. Members that the Law Commissions gave the matter careful consideration but rejected the long-term right of rejection in the context of sale of goods legislation. They argued that such a right would create major commercial uncertainties and would be unfair to sellers. Consumers who bought a defective product would, in effect, get free use of the goods until the defect appeared.
My hon. Friend the Member for Bristol, North-West (Mr. Stern) mentioned that point, although it was not picked up by anyone else. One of the possible effects of a Bill of this type, paradoxically, would be the possibility of consumers abusing the Act, if it became law, frivolously for mischievously to seek replacement of goods. That raises the important point——

Mr. Alan Williams: I have never heard anything so preposterous in my life. The Minister, whose post is a substitute for the Department of Prices and Consumer Protection which we had under the Labour Administration, is not at all worried about consumers. Consumers are thought to be the evil people in the market place and it is the poor innocent producers who need protection. The hon. Gentleman should go out into the real world.

Mr. Forth: That is pretty rich, coming from a member of the party that argued—and may, for all I know, still argue—for public ownership, nationalised industries and inherent monopolies. Of course, a Labour Government had to set up a Department to counteract the effects of the very monopolies that they had created. This Government do not have that sort of problem. We have the market place and competition, which will do the job extremely well.
The point that seems to have escaped all Labour Members is that we must seek a balance. No one wants to alter unduly the delicate balance in the law between consumers and suppliers and the intermediaries in the market place. One of the great risks is that this measure may do just that.

Mr. Wilshire: My hon. Friend said that there are members of the public who are determined to take advantage if they are given a chance. I would have been able to say that in my speech because I was involved in running a retail business before becoming a Member. As the Opposition are keen to waste so much time, I guess that I will be unable to make my speech. I should reassure my hon. Friend that some members of the public will take

advantage of every opportunity. I know that for the simple reason that, over 17 years, I have had to help my wife serve such people—[Interruption.]

Mr. Deputy Speaker: Order. Noise from sedentary positions does not help our proceedings. I hope that there will be less of it.

Mr. Forth: My hon. Friend the Member for Spelthorne (Mr. Wilshire) has reinforced, from his knowledge and experience, a point that has been made before. All hon. Members would do well to pay attention to this fact. We have heard from our legal experts and we have just heard from an hon. Member who has direct experience in the market place in the retail sector. His views, should therefore, be heard carefully. I hope that my hon. Friend the Member for Spelthorne has the time to make a brief contribution. I shall try to ensure that that happens if I can press on.
The Law Commissions considered the long-term right of rejection against sellers. I believe that the arguments are even more persuasive in the context of the buyer-manufacturer relationship. Provision for compulsory refund and replacement remedies would be grossly unfair to manufacturers because they would be obliged to refund the purchase price in full—not just the cost price to the manufacturer, but the price that the consumer paid when buying the goods from a retailier, who in this case is a third party over whose pricing policy the manufacturer has no control.
If the goods are bought under a finance agreement, the situation becomes even more unclear and potentially more unfair. The guarantor may be obliged at the customer's election to refund not just the full purchase price but any further sums outstanding on the credit agreement. The House should bear in mind that the guarantor is not necessarily party to that agreement and can exercise no control over the terms agreed. The guarantor who issued a consumer guarantee would, in effect, come close to writing a blank cheque in favour of the consumer. That is in itself reason enough for us to have serious reservations about the Bill.

Mr. Maclennan: The Minister makes it sound as though the manufacturer is obliged by the Bill to do something. The Bill makes no such provision. It allows manufacturers to decide whether to subscribe to a scheme. It is similar to the John Lewis Partnership saying that if a customer finds a cheaper product, it will reduce the price of its product accordingly. No one forces John Lewis to do that; it does it to boost its position in the market place. This reinforces the free market, of which the Minister pretends to be in favour.

Mr. Forth: I am surprised at the hon. Gentleman's last comment. My support for the free market is certainly not pretence—it is wholehearted and real. I am simply trying to remain somewhat consistent.
The hon. Member for Caithness and Sutherland (Mr. Maclennan) has put his finger on an interesting point; it is entirely up to those operating in the market place—whether retailers or manufacturers—voluntarily to introduce what measures they believe will make their products more attractive to the consumer.
What worries me is that if we overburden the guarantee with complexities and costs, as I believe we are doing in the Bill, we could end up dissuading manufacturers and


retailers from providing the guaranteed cover that everyone must believe is a good idea. That is one of the great drawbacks of the Bill.
Another problem is the dilemma created by a full refund for used goods. It is proposed that, under some circumstances, the right to full refunds or replacement could expire and may instead be subject to an allowance for use. The formula proposed for determining when that right expires is not particularly straightforward and differs for different products. I mentioned earlier the Law Commissions' reports, which highlighted some of the pitfalls of this approach. It is also likely to lead to uncertainty for consumers and may leave the consumer vulnerable in some circumstances.
I shall be as quick as I can because I realise that the passage of time may create some problems later.
A number of contributors have asked me what comments I have received about the legislation. I have received many. I will quote some of them so that the House can get a flavour, and know what the experts on the subject have said.
The Confederation of British Industry has described the proposals as "unnecessary and unworkable". The Finance Houses Association asked some serious questions about refund and replacement in the context of financed purchases—my hon. Friend the Member for Hornchurch (Mr. Squire) spoke expertly on that subject during the early part of the debate. The Law Society said that it does not agree with the proposals set out in the consultation paper, and the Society of Motor Manufacturers and Traders, quoted by one of my hon. Friends as being in favour of the measure, on reflection said that the Bill revealed a misunderstanding about how the motor industry operates.
During a visit to the United States last year I had extensive discussions with those involved in the American legislation and I found the extent to which the law has sought to intervene in the relationship between consumers and suppliers rather alarming. I have always thought it odd that so many hon. Members, in particular Opposition Members, should seek to import extensive elements of United States law. I yield to few in my admiration of the United States, but I have always thought that an attempt to introduce their rather litigious approach would hardly benefit British consumers—although it might benefit our lawyers. That is another major source of my reservations about the Bill.

Mr. Leigh: Has my hon. Friend received any representation from the European Commission? To what extent do the proposals in the Bill, given that they are burdensome on importers and manufacturers, run contrary to article 30 of the treaty of Rome? This is a serious problem that could snaffle the Bill before it becomes law.

Mr. Forth: My hon. Friend makes an important point. I was going to come to that later, but I shall try to deal with it now. There is at least a danger that the type of measure contained in the Bill could get us into some difficulties with the European Commission and the European Community. We must bear that factor in mind. My hon. Friend and I may not be enthusiastic about that aspect of our legislation, but it is nevertheless a fact. We have to bear the requirements of the European Community in mind.

Mr. Rogers: The Minister has answered a rather silly remark by the hon. Member for Gainsborough and Horncastle (Mr. Leigh). How will the Bill be affected by European legislation or vice versa?

Mr. Sedgemore: rose—

Mr. Deputy Speaker: Order. We cannot have interventions during interventions.

Mr. Forth: Perhaps if I say a few words, that will allow the hon. Gentleman to intervene. Does he wish to intervene now? He shakes his head. I am glad because we want to make progress. I have found that more difficult than I anticipated, but the House is always capable of surprising us. May I give just a few more examples?

Mr. Leigh: Will my hon. Friend give way?

Mr. Forth: No, I must resist giving way to my hon. Friend on this occasion.

Mr. Leigh: It bears directly on this point.

Mr. Forth: If my hon. Friend insists, I shall give way to him.

Mr. Leigh: My hon. Friend may not have heard the sedentary intervention by the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) about voluntary arrangements. We are talking about compulsory labelling.

Hon. Members: No, we are not.

Mr. Forth: We should avoid getting bogged down dealing with matters that would take up an excessive amount of time, even in Standing Committee, were the Bill to receive a Second Reading.
The exchanges illustrate my earlier point: that the Standing Committee proceedings on a measure such as this—a long and complex measure for which Standing Committees on private Member's Bills are not entirely suited—would lead to even greater problems that might be very difficult to resolve. I am grateful to my hon. Friend the Member for Gainsborough and Horncastle for having highlighted the point. Opposition Members have highlighted it, too.
The Consumers Association, no less, said that it would support the proposals, but without any great enthusiasm. The association's approach focuses on the Sale of Goods Act rights for buyers. We hope that those rights will be extended and not confined to buyers. One would have thought that the Consumers Association's support for such a measure would be unrestrained, but it has expressed considerable reservations about it.
Representations have been made to me by many other bodies, including the Norwich and Norfolk chamber of commerce. It says that the disadvantages outweigh the advantages of the proposals. There have been many other representations of that kind, but I shall not weary the House with them. However, I hope that I have given sufficient of the flavour of the representations to suggest that those who are knowledgeable about such matters have serious reservations about the Bill.
My hon. Friend the Member for York (Mr. Gregory) dealt with the notorious Bernstein case in detail. Mr. Bernstein's car broke down with an engine seizure after about 140 miles and three weeks on the road. It is worth considering the case a little more closely, for reasons to which I shall come in a moment. The outcome of the case


was that the engine was repaired without charge. The judge found that Mr. Bernstein was also entitled to damages for the cost of the petrol, five days without a car and something to make up for his spoilt day out—a total of £237·50. That was not what Mr. Bernstein wanted. He wanted to reject the car and get his money back. I have looked carefully at the proposed terms of the consumer guarantee in the Bill, but I think that it is unlikely that it would have left Mr. Bernstein any better off. The proposed consumer guarantee would have entitled Mr. Bernstein to free repair of the engine and to compensation, or to a replacement on loan while his car was under repair. It is interesting that one of the most notorious cases that has so often been quoted in recent years would not, under the terms of the Bill, be much altered and there would not be a great improvement in Mr. Bernstein's compensation.

Mr. Gale: Is not the fundamental difference that under the Bill Mr. Bernstein would not have had to go to court to obtain redress?

Mr. Forth: The provisions of the Bill attempt to make matters much easier, but there are doubts as to whether it would. During his recent Adjournment debate, and again today, my hon. Friend the Member for Waveney (Mr. Porter), proposed a new body to deal with these matters. He said that the present arrangement was overbureaucratic and that his new body would remedy that defect. It is risky to set up a new bureaucracy to overcome the problems of an existing bureaucracy. My hon. Friend has a strong desire to help consumers, but I doubt whether his proposals would necessarily have that effect.
In view of the time, I must bring my remarks to a premature end although I had much more to say. I believe that the Bill contains many good elements and I pay tribute to the hon. Member for Clwyd, South-West for introducing it. But it also has serious difficulties and flaws. I am not convinced that if the Bill were given a Second Reading it would necessarily emerge from Standing Committee in sufficiently good order for the House to want to support it.

Mr. Alan Williams: That is for the House to decide.

Mr. Forth: As the right hon. Gentleman says, that is for the House to determine and it always has that opportunity. I regret that the hon. Member for Clwyd, South-West was not more modest or less ambitious in his aims. He has introduced a complicated and ambitious Bill that contains many provisions and, as I and many of my hon. Friends have pointed out, many difficulties. Therefore I hope that the House will consider those matters carefully in deciding how or whether to proceed with the Bill. The National Consumer Council has laboured long and hard on the matter and has produced comprehensive proposals, but I do not know whether it carried out the detailed consultation work that the Department of Trade and Industry always undertakes to establish the feasibility or workability of a Bill.
For all those reasons, I urge hon. Members to give the most careful consideration to the Bill before they decide how they will vote.

Mr. Nigel Griffiths: I first pay tribute to the National Consumer Council for producing the Bill and for the valuable information and proposals that it contains. I pay tribute also to my hon. Friend the Member for Clywd, South-West (Mr. Jones), who has done so much work on the Bill and has done so much to gather support for it. It is sponsored by four Labour Members, six Conservative Members and two Alliance Members, and we are extremely pleased about that. There have been many speeches in support of it, including that of my right hon. Friend the Member for Swansea, West (Mr. Williams), a distinguished former Minister and champion of consumer rights. The hon. Member for Waveney (Mr. Porter) articulated the views -of most hon. Members when he said,
Rarely has a Bill been more timely.
The Bill is necessary to give the buying public a clear indication that the goods they buy are backed by genuine guarantees. It comes in the wake of current legislation which has failed to offer comprehensive protection to the public. Currently, many warranties cover parts but not labour, or labour but not call-out charges. They cover some parts for three months and other parts for six months and fail to cover key machinery which is subject to normal wear and tear.
The Bill provides for a 12-month statutory money-back guarantee on a wide range of expensive goods. It ensures a refund or replacement for faulty goods which are out of commission for 21 days in the first year and it guarantees the replacement of products which are out of action for four days consecutively or two in the case of cars, so that buyers are not inconvenienced as they are at the moment. Because it is voluntary and not manatory, as the hon. Member for Newark (Mr. Alexander) stressed, it cannot be accused of placing burdens on business.
The Minister has given us details of his objections, which are mainly ideological. For him, the producer, not the consumer, is king. He outlined his solution, which lies in consumer choice in the market place, but he then moved on with undue haste to talk about the Law Commission.
The Minister was much more loquacious when talking to the Daily Telegraphabout how consumers can exercise their rights. He said:
If consumers don't like what they are getting from…one shop, they need only change their buying habits." 
Perhaps the Minister moves in circles where people can easily change their buying habits—a washing machine a week, a television a month or a car every three months—but for ordinary members of the public the failure of a cooker or washing machine all too often brings misery as they fight but fail to get satisfaction. Last year, there were 14 million such people.
On Monday, in an answer to a parliamentary question, the Minister refused to list the groups that support or oppose the principle of the Bill. I have a list of companies that support it, from which I have drawn some examples—Hotpoint, Argos, the Retail Consortium and Volvo. The best companies offer no-questions-asked guarantees; Marks and Spencer was founded on that principle, yet the Minister calls it unworkable.
The architect of opposition to the Bill is not the Confederation of British Industry or the retail community but the Minister. A former Tory Member of Parliament wrote in The Times of the Minister's appointment:


His appointment as Consumer Protection Minister is some kind of joke.
The Minister has been closely associated with a small but influential group of Conservative Members called "No Turning Back". His message to the consumer is simply,
No handing back.
To articulate his opposition, the Minister feels for his phrase book. It contains only one phrase, but it is his favourite-placing burdens on the business community. In his interview with the Daily Telegraph he embellished that phrase by saying that the Bill
would place an absurd burden on the business community.
The CBI says that it would prefer an amendment to the Sales of Goods Act 1979. The Consumer Association says that it will not oppose the Bill. Consumers and most hon. Members support it, and we have the opportunity to ensure that it is given a Second Reading.

Mr. Ron Davies: rose in his place and claimed to move, That the Question be now put.

Question put,That the Question be now put:

The House divided: Ayes 108, Noes nil.

Division No. 52]
[2.2 pm


AYES


Alexander, Richard
Crowther, Stan


Allen, Graham
Cryer, Bob


Banks, Tony (Newham NW)
Cummings, John


Barnes, Harry (Derbyshire NE)
Dobson, Frank


Battle, John
Doran, Frank


Bennett, A. F. (D'nt'n &amp; R'dish)
Dunnachie, Jimmy


Bidwell, Sydney
Dunwoody, Hon Mrs Gwyneth


Bowden, Gerald (Dulwich)
Emery, Sir Peter


Bradley, Keith
Ewing, Mrs Margaret (Moray)


Brown, Gordon (D'mline E)
Field, Frank (Birkenhead)


Brown, Nicholas (Newcastle E)
Flynn, Paul


Campbell, Ron (Blyth Valley)
Foot, Rt Hon Michael


Campbell-Savours, D. N.
Foster, Derek


Cartwright, John
Fraser, John


Clwyd, Mrs Ann
Gale, Roger


Cohen, Harry
Garrett, Ted (Wallsend)


Cook, Frank (Stockton N)
Gould, Bryan


Corbyn. Jeremy
Greenway, Harry (Ealing N)


Cousins, Jim
Griffiths, Nigel (Edinburgh S)


Cox, Tom
Griffiths, Win (Bridgend)





Grocott, Bruce
Randall, Stuart


Hargreaves, Ken (Hyndburn)
Rathbone, Tim


Hayhoe, Rt Hon Sir Barney
Redmond, Martin


Haynes, Frank
Rees, Rt Hon Merlyn


Hefter, Eric S.
Rhodes James, Robert


Hoey, Ms Kate (Vauxhall)
Richardson, Jo


Howells, Dr. Kim (Pontypridd)
Rogers, Allan


Hughes, Robert (Aberdeen N)
Ruddock, Joan


Hughes, Roy (Newport E)
Sedgemore, Brian


Hughes, Simon (Southwark)
Shepherd, Richard (Aldridg)


Hunt, Sir John (Ravensbourne)
Shersby, Michael


Jones, Barry (Alyn &amp; Deeside)
Shore, Rt Hon Peter


Jones, leuan (Ynys Môn)
Short, Clare


Jones, Martyn (Clwyd S W)
Skinner, Dennis


Kaufman, Rt Hon Gerald
Smith, C. (Isl'ton &amp; F'bury)


Leadbitter, Ted
Smith, J. P. (Vale of Glam)


Livingstone, Ken
Smyth, Rev Martin (Belfast S)


Lloyd, Tony (Stretford)
Soley, Clive


McKay, Allen (Barnsley West)
Summerson, Hugo


Maclennan, Robert
Taylor, Mrs Ann (Dewsbury,)


McWilliam, John
Taylor, Matthew (Truro)


Madden, Max
Thomas, Dr Dafydd Elis


Martin, David (Portsmouth S)
Thompson, Jack (Wansbeck)


Michael, Alun
Townsend, Cyril D. (B'heath)


Mitchell, Austin (G't Grimsby)
Turner, Dennis


Morgan, Rhodri
Ward, John


Morley, Elliot
Wardell, Gareth (Gower)


Morris, Rt Hon A. (W'shawe)
Wareing, Robert N.


Morris, Rt Hon J. (Aberavon)
Welsh, Andrew (Angus E)


Morris, M (N'hampton S)
Williams, Rt Hon Alan


Orme, Rt Hon Stanley
Winnick, David


Pendry, Tom
Wise, Mrs Audrey


Pike, Peter L.



Porter, David (Waveney)
Tellers for the Ayes:


Prescott, John
Mr. Ron Davies and


Quin, Ms Joyce
Dr. John Marek.


NOES


Nil


Tellers for the Noes:



Mr. John Marshall and



Mr. David Wilshire.



Bill read a second time and committed to standing committee pursuant to Standing Order No.61(Committal of Bills)

Question put accordingly and agreed to to.

Licensing (Low Alcohol Drinks) Bill

Order for Second Reading read.

Sir Peter Emery: I beg to move, That the Bill be now Read a Second time.
The Bill is neither as complicated nor as controversial as the Consumer Guarantees Bill. It is with great pleasure, therefore, that I recommend it to the House. I want to describe briefly the proposals in the Bill and I shall refer to the reasons for promoting it. For the first time, the Bill defines for England, Scotland and Wales the same amount of alcohol—0·5 per cent.—that must be in a drink for it to be legally sold in unlicensed premises. That is a reduction from the existing amount of 1·2 per cent. in volume of alcohol.
The Bill also ensures that testing, if it is to be carried out, should be done at the time of consumption or of supply, rather than, as was previously the case, at any time during the manufacture of the drink. Many people are trying to produce low alcohol beers or non-alcoholic beers and wines. Those drinks are produced in the normal way and alcohol is extracted after production. Because such drinks once had an alcoholic content, if they were sold in a non-licensed premises, the seller could be taken to court. According to the Bill, an offence would be committed at the point of supply if the alcoholic content is above 0·5 percent.
I am delighted to say that the right hon. Member for Morely and Leeds, South (Mr. Rees) a former Home Secretary, the deputy leader of the Liberal party and my right hon. Friend the Member for Castle Point (Sir B. Braine), the Father of the House, all support the Bill. Also, because the Bill applies to Scotland, it is supported by a number of Scottish Socialist Members.

Mr. Dennis Skinner: That is a dodgy crowd.

Sir Peter Emery: Well, some of them are friends of the hon. Member for Bolsover (Mr. Skinner). I do not know whether his friends are dodgy, but that is another matter.
I believe that the Bill has Government support. I received a copy of a letter today from Sir Donald Maitland and the Health Education Authority, which states:
At a meeting this afternoon of representatives of the Health Education Authority, Alcohol Concern, the Brewers Society and the Wine and Spirits Association, we agreed to urge you to do all you can to ensure that Parliamentary time is made available to ensure the passage of Sir Peter Emery's Private Member's Bill on the Sale of Low and No Alcohol in Unlicensed Premises.
I am informing Sir Peter separately of the Group's support for his measure.
That letter was sent yesterday to my hon. Friend the Parliamentary Under-Secretary of State for the Home Department and I have permission to refer to it today.

Mr. Skinner: Will such drinks be sold in the Strangers' Bar?

Sir Peter Emery: It is possible that some objections to the Bill might be made by those who would have liked to see the alcoholic level at 0·05 per cent. and not 0·5 per cent. In response to the hon. Member for Bolsover some of those drinks are sold in the Strangers' Bar—although not many perhaps.
There is general agreement among the manufacturers that they are willing to accept the level of 0·5 per cent. As

far as I understand, no formal objections have been made to the Bill and the Government have no desire to amend it. Of course, to stop the Bill entering Committee, objections might be raised by hon. Members who have private Member's Bills that they want to see make progress. Otherwise, if my Bill takes some time in Committee, their Bills may be affected.

Mr. Stuart Randall: Why has the hon. Gentleman not proposed 0·05 per cent. for beers while leaving 0·5 per cent. for shandies and wines? Technology is developing at the moment and beers with a very alcohol content such 0·05 per cent. can be produced and have good flavour. Why has the hon. Gentleman not suggested the lower figure for beers while leaving 0·5 per cent. for other drinks? We could then offer the public almost non-alcoholic drinks if that is what they want.

Sir Peter Emery: That is a fair question and I am delighted to answer it. One particular manufacturer has the techniques necessary to produce beer with a 0·05 per cent. alcohol content and it has advocated the same argument as that put by the hon. Member for Kingston upon Hull, West (Mr. Randall).
The manufacturer argued that the supply of such beer is beneficial in certain instances, for example, when someone's blood-alcohol level stands at 79mg. That person is close to the 80mg level and that 1mg increase of alcohol in the bloodstream could be brought about by the purchase of a 0·5 per cent alcoholic beer.
We are not trying to legislate, however, for the person who is nearly over the limit as regards drink-driving. We are trying to ensure that shandy producers—at the moment such drinks have a 0·9 per cent. alcoholic content—reduce the alcohol content to 0·5 per cent. We want to ensure that there is general agreement in the industry in favour of a 0·5 per cent. level.
From medical evidence I gather that there is a residual amount of alcohol in the blood, but we want to ensure that the 0·5 per cent. Alcoholic content beer will do next to nothing to increase the blood-alcohol content when ordinary people have had a drink.

Mr. Randall: I do not want to make demands on the hon. Gentleman's time, but when seeking to introduce such legislation, surely we should take all factors into account. A person who has been at the pub all evening and who feels that he is near the limit could purchase a beer with a 0·5 per cent. alcoholic content and discover that he is then over the legal limit. If that person could purchase a drink with an alcoholic content of 0·05 per cent., he could drink it confidently in the knowledge that it would not increase the alcohol in his blood. Surely we should take that into account.

Sir Peter Emery: One would have to know that one had reached the level of 79mg of alcohol in the blood to appreciate that a 0·5 per cent. alcoholic beer could be of harm. I do not know how many people who enjoy a jovial drink know the exact level of alcohol in their blood at a given time. I do not want to encourage people to go over the limit and to drive. Therefore, I do not want to encourage people who are near the limit to continue drinking. Nobody knows how near he is to the alcohol limit which prevents him from driving. I would rather


encourage people not to drink and drive than to drink almost to the legal limit and then to top up their alcoholic intake with low alcohol drinks.
The general feeling is that a beer with an alcoholic content of 0·5 per cent. will affect only those closest to the limit. There is no reason, however, to encourage people to drink to that limit in the belief that they will then get away with drink-driving. My arguments are based on a desire to reach general agreement because any private Member's Bill needs such general agreement, especially if one is 16th in the queue.

Mr. David Wilshire: The Bill has my wholehearted support. Does my hon. Friend agree that it is vital to obtain a fixed figure of alcohol content, irrespective of what it might be? Then at least one will know where one stands when one buys drinks. At the moment, one can intend to drink no alcohol, but if one buys the wrong product, one can end up drinking a great deal more than one thinks.

Sir Peter Emery: That is true of anyone who intends to drive. What my hon. Friend says is of great importance where it affects people who may decide to drive.
The Bill attempts to clarify the position and to make sure that those who buy drinks at non-licensed premises can be absolutely certain of the alcohol content of drinks, whether shandy or any other product. It will bring about standardisation for the first time.
I am sorry that the Bill does not apply to Northern Ireland. I considered including the Province, but I gather that the licensing laws in Northern Ireland are so complicated that I should have had to add another three pages to my Bill. I apologise to Northern Irish Members that I have not included them.

Mr. Skinner: What about cider?

Sir Peter Emery: That is above the level and people will enjoy it if they drink it.

Mr. Wilshire: I am aware of the time, but before my hon. Friend moves on from what the Bill excludes, may I ask him whether he gave any thought to excluding high alcohol beverages? The variation in such drinks is equally alarming. A drink that is called strong can be 6, 7, 8 or 9 per cent. The effects of that can be quite devastating, too.

Sir Peter Emery: I had enough trouble dealing with low alcohol drinks. To deal with high alcohol drinks is up to the individual.
Consideration of the issue was based on several premises. The first was the short-term intoxicating effect of alcohol. The eventual blood-alcohol level depends on

many factors, but the maximum acceptable level in a young person was taken to be 20mg per 100mg. It was taken to be a reasonable assumption that the majority of young people would not drink more than an average of two pints in one hour, six pints in three hours, or eight pints in four hours. On that basis, the maximum strength of an alcoholic beverage that might be made freely available was taken to be that which would allow a typical young person to consume a reasonable quantity of the drink without exceeding a blood-alcohol level of 20mg, which is a quarter of the level which would put a person over the limit to drive.

Mr. Skinner: I came here thinking that the hon. Gentleman had introduced a Bill to control levels of alcohol. The more that I listen to him, the more that he seems to talk about the breathalyser limit. He makes his Bill sound like a beat-the-breathalyser measure. What is the Bill about? Is it about controlling the level of alcohol or about encouraging people to go close to the breathalyser limit? Once people have reached that level, does the Bill say, "Have a few of these and you will be all right."? That seems a bit dodgy to me.

Sir Peter Emery: I am sorry that I have been so imprecise. The only time that I talked about the breathalyser was in answer to the Opposition spokesman, the hon. Member for Kingston upon Hull, West. The Bill has nothing to do with the breathalyser level. I wish to make certain that no one suggests that it does. That would be a great mistake because the Bill has nothing to do with encouraging people to reach that level.
I was saying that my Bill does nothing to increase, even to a quarter of the breathalyser level of 80mg per 100mg, the level that can be reached by drinking low alcohol beverages. The aim of the Bill is to standardise the position and to ensure that everyone clearly understands it. For the first time, the Bill makes it clear that the offence is at the point of sale or supply, rather than during production. It is as simple as that.
I believe that the vast majority of the British people and hon. Members support the Bill. I hope that this simple Bill will receive the full support of the House. It is generally believed that young people should be able to go to a grocery store and buy drinks in the knowledge that they are of an alcoholic level that will not affect them. The Bill will ensure, for the first time, that that can be brought about. Therefore, I hope that I shall have the support of all hon. Members in obtaining a Second Reading for my Bill.

Question put and agreed to.

Bill accordingly read a Second time, and committed to cr Standing Committee pursuant to Standing Order No. 61 (Committal of Bills)

Private Members' Bills

Mr. Bob Cryer: Shall I move my Registration of Commercial Lobbying Interests Bill now, Mr. Deputy Speaker?

REFORM OF THE HOUSE OF LORDS BILL

Order for Second Reading read.

Mr. Deputy Speaker (Mr. Harold Walker): Queen's consent not signified. I cannot put the Question.

Mr. Graham Allen: Has the Queen not given her consent, Mr. Deputy Speaker?

Mr. Deputy Speaker: She has not been in touch with me.

Mr. Allen: Oh dear, I am sorry.

COALMINING SUBSIDENCE (DAMAGE, ARBITRATION, PREVENTION AND PUBLIC AWARENESS BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 20 April.

HUMAN RIGHTS BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 9 February.

TOXIC AND HAZARDOUS WASTE SUBSTANCES (MISCELLANEOUS PROVISIONS) BILL

Order for Second Reading read.

Mr. Deputy Speaker: Second Reading what day?

Mr. Jimmy Dunnachie (Glasgow, Pollok): With the permission of the hon. Member in charge of the Bill, now Sir.

Mr. Deputy Speaker: The Bill has not been printed, so I cannot put the Question.

Second Reading deferred till Friday 2 February.

REGISTRATION OF COMMERCIAL LOBBYING INTERESTS BILL

Order for Second Reading read.

Hon. Members: Object.

Mr. Deputy Speaker: Objection taken. However, as the Bill has not been printed, again I cannot put the Question.

Second Reading deferred till Friday 2 February.

Mr. Cryer: On a point of order, Mr. Deputy Speaker. You said that the Bill has not been printed, but may I assure you that the full copy of the Bill has been handed

in for reprinting and that I am only awaiting it? Therefore, it is not a question of the Bill having been deliberately withheld.

Mr. Deputy Speaker: I am advised that the Bill has not yet been printed, so I cannot put the Question under the Standing Orders.

Mr. Dennis Skinner: Further to that point of order, Mr. Deputy Speaker. I should like to draw your attention to what I consider to be a misdemeanour. I refer to an action by the Government Deputy Chief Whip when the hon. Member for Honiton (Sir P. Emery) was moving the Licensing (Low Alcohol Drinks) Bill. The Deputy Chief Whip told the hon. Gentleman to keep talking.
If the hon. Gentleman had sat down, as he wished to do, two or three more Bills could have been moved in the time before half-past two. Only the intervention of the Deputy Chief Whip prevented that. Let's face it, the Government Deputy Chief Whip is not supposed to play a part in private Members' Bills on this day, but he encouraged the hon. Gentleman to keep speaking. We could have had the subsidence Bill through, and that of my hon. Friend the Member for Bradford, South (Mr. Cryer), which seeks to control commercial lobbying in the House of Commons. The Government Deputy Chief Whip has caused this trouble and he should be brought to account. This is a Private Members' day.

Mr. Deputy Speaker: Private conversations between hon. Members are not matters on which I rule.

SECURITY INDUSTRY BILL

Order for Second Reading read.

Mr. Deputy Speaker: Not moved.

BUSINESS OF THE HOUSE

Ordered,
That, at the sitting on Tuesday 30th January, notwithstanding the provisions of Standing Order No. 15 (Prayers against statutory instruments, &amp;c. (negative procedure)) the Motions in the name of Mr. Neil Kinnock relating to Income Tax may be proceeded with, though opposed, for one and a half hours after the first of them has been entered upon; and, if proceedings thereon have not been previously disposed of, Mr. Speaker shall, at the expiration of that period, put the Question already proposed from the Chair; and no further such Motions shall then be made.—[Mr. Chapman.]

Ordered,
That, at the sitting on Tuesday 1st February the Motions in the name of Sir Geoffrey Howe relating to Private Members' Motions, Motions for Leave to Bring in Bills, &amp;c., New Writs, Public Petitions and Motions for Leave to Bring in Bills, &amp;c. (Budget Day) may be proceeded with until Seven o'clock; and at that hour, if proceedings thereon have not been previously disposed of, Mr. Speaker shall put successively the Question already proposed from the Chair and the Questions on such of the remaining Motions as may then be made, including the Questions on any amendments thereto which may be selected by Mr. Speaker.—[Mr. Chapman.]

Uniform Business Rate (North-East Kent)

Motion made, and Question proposed, That this House do now adjourn—[Mr. Chapman]

Mr. Roger Gale: I am grateful for the opportunity of raising a matter that is of special concern to my constituents and to those of my hon. Friend the Member for Thanet, South (Mr. Aitken), who hopes to catch your eye, Mr. Deputy Speaker, during this short debate.
First, I should say how pleased we both are to see my hon. Friend the Under-Secretary of State for the Environment, the hon. Member for Southampton, Itchen (Mr. Chope), in his place. We are aware that he is imminently expecting an addition to his family and I am certain that there are places that he would much rather be this afternoon than in the House. My hon. Friend the Member for Thanet, South joins me in wishing both him and his wife very well.
I shall refer specifically to the towns of Margate and Herne Bay in north-east Kent, and my hon. Friend for Thanet, South will refer to Ramsgate and Sandwich and other areas of concern in north-east Kent. North-east Kent still has the highest unemployment in the south-east. The special circumstances of that area of England led my right hon. Friend the Prime Minister to set up the Thanet working group in 1987. The report by the group led to a series of measures that were instigated by the Government, and they are now beginning to take effect. Those measures include considerable investment in infrastructure, including the commitment of more than £57 million of Government money for the improvement of the Thanet way, the main road into the area, and the development of Kent international airport. We are looking forward to the development of a business park adjacent to Manston airport. All those measures are vital and are having an effect.
Unemployment in the area is falling. It is still 10·3 per cent. overall, and male unemployment is at a wholly unacceptable level of 14·6 per cent. Recovery in the area is fragile. Between October and December 1988 there was a small fall of 37 in the unemployment figures, which was against the trend for that time of the year when seasonable unemployment rises. Sadly, in the same period last year, the figure rose by 214, conforming with the seasonal trend. That is worrying. It would be tragic if the Government's hard work and commitment are to be put at risk.
Against that backdrop, I raise a matter of special concern— the effects of the uniform business rate on small shopkeepers and small hotels and guest houses in north-east Kent. Small shops in the area face an enormous threat from out-of-town trading, and I suspect that my hon. Friend the Member for Thanet, South will refer to a specific instance. The high streets are beginning to consist more of estate agents, banks and building societies than traditional traders. No doubt, my hon. Friend will say that all high streets throughout the country face that threat.
Sadly, north-east Kent cannot yet be regarded in economic terms as part of the glorious south-east. The Government suggest an average rateable value of eight times the 1973 figure. In Ashford, which is regarded as the hot spot of the south-east because of the effects of the Channel tunnel, the figure is 8·27 times the 1973 valuation. In Thanet, the valuation has risen by 10 times, and in

Canterbury city it has risen by 12 times. The Canterbury city area includes the seaside town of Herne Bay, which is in my constituency, and is not in any way commensurate with Canterbury itself. The Conservative local authority in Canterbury has recently invested considerable sums of money in pedestrianising a shopping precinct, and that work is just beginning to show dividends in terms of growth in business. With great respect to my hon. Friend the Minister, that suggests that now is not the time to impose a greater burden upon small businesses that are just beginning to recover.
The effects of the uniform business rate in Thanet are potentially more alarming. I give the House two instances. The first concerns a family furnishing company in Northdown road, Cliftonville, where the rateable value has increased from £5,000 to £55,000. Five professional assessments suggest that, on a very sunny day, the figure might be more realistically set at £25,000 and that, within the current economic climate, it is more probably £20,000. The second example concerns a business at Westgate on Sea, again in my constituency, which was doing extremely well and was set to expand. Because of that, the proprietor purchased the property next door. The valuation of that empty property has risen by 300 per cent. The owner now intends to demolish the additional property and, as a result, no more new jobs will be created. That is not a hypothetical instance—the decision has been taken.
In north-east Kent rateable values represent about 50 per cent. of profits. That must be set against 40 per cent. or less in most of the rest of the country. In short, less profitable businesses in north-east Kent will subsidise more profitable businesses elsewhere.
Many small hotels and guest houses in my constituency have been striving to invest in new facilities and upgrade their facilities to provide what the modern holidaymaker wants. Inevitably, many of those little companies are family businesses. They consist of husbands and wives and sons and daughters working together to run the small seaside family guest house that many people like and admire. They also enjoy an eight-week summer season, but that is not reflected in the apportionment between the domestic rates—the community charge that will be paid by four people in a family—and the business use of premises for only a few weeks of the year.
Only last week I attended a meeting of the Surrey road hoteliers in Cliftonville and formed the distinct impression that many businesses would prefer to switch to 52-week of the year bed-and-breakfast, board and lodging, social benefit claimant work rather than pursuing the traditional seaside holiday trade. If that happened it would further erode the tourist base and hasten a downward spiral of the tourist trade in the area.
I ask my hon. Friend the Minister to consider a different composite hereditament—the shopkeeper who lives in a flat over his shop. I am indebted to the district valuation office, which has been most helpful. It suggested that some thought might be given to the possibility of an imbalance between the charges for the domesic properly and those for the shop or business premises below. It would appear that the apportionment in 1973 might have become out of kilter. Those family businesses, where the shopkeeper lives over the shop, provide a community service and we need to encourage them.
I do not expect my hon. Friend the Minister to answer all my questions today. I wish to make a half a dozen or so points that I hope he will consider. Were the social


circumstances in north-east Kent taken into consideration—as the former Secretary of State, my right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), said they would be—when the Bill was debated a couple of years ago? Will the increases in the area be limited to a Government average, as suggested, of 8 per cent.? Will my hon. Friend review the operation of rating systems as they affect seasonal hotels, and especially guest houses? Will he review the approach to composite hereditaments and consider, in the case of small shops occupied by the shopkeeper and his family, waiving the first community charge as a reflection of the potential imbalance between the commercial and the domestic properties? Will he consider extending the phasing-in period for small businesses, further to mitigate the potential inflationary effect?
In particular, will my hon. Friend consider retirement relief and the extension of the carry-over or transitional period so that small shopkeepers seeking to retire can sell their businesses in the knowledge that the incoming business person will benefit from the same transitional relief? I should be happy if that transitional provision were confined to cases where the existing business is continued in the same form. Will my hon. Friend consider raising the qualification threshold for small businesses from a rateable value of £10,000 to £15,000, which would embrace many more in north-east Kent?
I reiterate my support for the principle of a uniform business rate. Its intent—a fairer national cutting of the business rate cake—is entirely proper. However, I do not believe that any part of that intent is to put small firms, which contribute to the economic recovery of north-east Kent, out of business. I think that my hon. Friend will agree with that.

Mr. Jonathan Aitken: I am most grateful to my hon. Friend the Member for Thanet, North (Mr. Gale) for his courtesy and co-operation in giving me this opportunity to say a few words about the uniform business rate problems faced by my constituents, especially in the north-east Kent towns of Ramsgate, Broadstairs and Sandwich.
My first general point, and one on which I strongly concur with my hon. Friend, is that, whether we are talking about the level of rates, rents, wages or just about any of the usual economic indicators, the Thanet, South and North constituencies should not be simplistically classifid as part of the prosperous south-east. The Isle of Thanet and its nearby towns and villages comprise an area in which times are still quite hard for many small business men, especially those at the sharp end of commercial life who have to meet a payroll and keep the bank manager happy. Many now feel that the UBR could be the last straw that breaks the camel's back.
I do not want to claim that everything that is said about UBR by some of those who have been shaken by the valuations that they have received is necessarily correct; nor do I believe that there is an atmosphere of doom, gloom and poverty in the business community of north-east Kent—it would be an exaggeration to say that. There are a great many success stories and stories of good news in the area. There are, however, some difficulties with

UBR, and it would be helpful to my hon. Friend the Minister if I sketched some of the economic scenery that surrounds the local UBR problem.
I should like to highlight the town of Ramsgate. In some ways, it is much more like a north-east town than a south-east town in economic terms. Ramsgate has the biggest Department of Social Security office in south-east England, with 16,000 claimants on its books. It has the highest concentration in south-east England of pensioners who are dependent only on the state pension for their income. It has an unemployment rate which, even after some welcome falls, still remains stubbornly well above 10 per cent. It has a road, rail and even pavement infrastructure which is crumbling into a state of advanced decay. We have suffered a number of worrying economic disappointments in recent weeks. These include the closure of the last of the nearby east Kent coal mines, 100 redundancies at the Astra fireworks and pyrotechnics factory and, above all, the shutting of the Marks and Spencer branch, the jewel in the crown of Ramsgate shopping centre.
All these factors have an impact on UBR. They affect the health of the local economy and the ability of small traders to pay the increases in their rates bills. Above all, they call into question the accuracy of some of the valuations that were made by the Inland Revenue valuation team in April 1988 as the basis of UBR.
I want to make a critical comment about that valuation date. Under the old legislation, which was last used in April 1973, Inland Revenue valuations were for the date on which rates were paid—in other words, in April 1973, rates were paid on a valuation for April 1973. By appealing or submitting an alternative proposal, one could get a later valuation date. The new legislation has created what is called the antecedent valuation date—a concept which did not exist under the old legislation. It means that, on 1 April 1990 the business man is asked to pay his rates on valuations made on 1 April 1988. This antecedent valuation date may be convenient for some civil servants, but in some cases it is unfair to ratepayers.
Let us consider what has happened in the intervening two years. The macro-economic indicators have gone the wrong way. Interest rates are up from 8 per cent. to 13 per cent. Inflation is up from 5 per cent. to 7·7 per cent. Wage and utility costs are up as well. Similarly, the local micro-economic indicators are going the wrong way. That Marks and Spencer closure in the high street of Ramsgate was a bombshell, because all rents in the shopping area around the Ramsgate central district are decreasing. At least 15 shop properties are empty, and shopping activity in the town is likely to move to the out-of-town shopping centres. How does one explain to a property owner in the middle of Ramsgage that he should be valued for his uniform business rate on 1988 rents and valuations, when everyone knows that in the area affected by that Marks and Spencer closure those valuations will have decreased by 1990? That is a manifest unjustice. My understanding of the legislation is that, even on appeal, the 1988 valuations will stand, and that social and economic factors will not be taken into account by appeals tribunals.
There is perhaps one loophole on which I would seek the guidance of my hon. Friend the Minister. Section 121 of the Local Government and Finance Act 1988 states that, when determining an appeal or alternative proposal, any physical aspect of the locality shall be taken into


account at the date of the appeal or proposal. That section could be important to the shops and businesses around the area affected by the Marks and Spencer closure.
I appeal to my hon. Friend to take an interest in the interpretation of section 121. I have observed that the notes and guidance regulations on appeals have not been issued to the valuation officers, so could my hon. Friend please look sympathetically on the interpretation of section 121? In an area that has been blighted by physical change—it could be the closure of a steel works, but in the case of Ramsgate it is the closure of the biggest department store—I believe that rents, rates and the calculations based upon them should be downgraded by an appeals tribunal.
There are problems outside the area of Ramsgate's central shopping district, and they are highlighted by the anxieties of a small jeweller in Broadstairs high street—D. J. Pearce. His rates are up by 270 per cent. As a realistic business man, he appreciates the Government's phasing-in arrangements and knows that he will have to pay no more than an annual increase of 15 per cent. plus the rate of inflation, which means a pretty painful 23 per cent. Hopefully, it will be less if the rate of inflation eases.
In 1996, Mr. Pearce and others in a similar position will face what the Americans call a "double whammy". He will have to pay an increase in his 1990 valuation, plus the effects of the 1995 revaulation, and that could be a painful blow. Many small business men fear the double whammy—and that raises the question, should we not elongate the phasing-in period? In my view, there should be a seven year phasing-in period for the introduction of the uniform business rate, and I appeal to the Under-Secretary to consider that suggestion.
Finally, I recognise that the root of the problem is that the Labour Government funked a rate revaluation in 1978, which was then overdue, and we are now facing the results of 10 years of neglect. In the long run, the uniform business rate is probably a much fairer method of charging business rates and I think that the Government's transitional arrangements are a helpful cushioning step. The Government deserve some credit for grasping the nettle of revaluation—which is politically unpopular—and implementing it with some sensitivity.
Today I am arguing for greater flexibility in introducing the uniform business rate, particularly in north-east Kent. We need a longer phasing-in period of seven, not five, years, and a more flexible appeals system to allow tribunals to take into account changing circumstances since the valuation date of 1 April 1988. Above all, we must be sympathetic and flexible towards the small business community so that UBR is not seen as the last straw that breaks the back of small business.

The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): At the outset, may I say to my hon. Friend the Member for Thanet, North (Mr. Gale), how much I appreciate his kind remarks at the beginning of his speech. I shall certainly pass on his best wishes to my wife. When we knew that this important Adjournment debate was taking place today we agreed that we should make domestic arrangements so that I could be here to participate, and so it has turned out.
I also congratulate my hon. Friends on their welcome endorsement of the principles behind the new business rate and the generous recognition that, if businesses in general

are to benefit from the certainty and stability which the new system will provide, increases for some businesses are inevitable.
My hon. Friends both referred to the substantial help that the Government have given to facilitate the economic regeneration of north-east Kent and I am grateful for that. I am sure that there is no intention behind the changes in the rating system to jeopardise that economic regeneration.
It is right that the long-overdue redistribution of the rates burden between business sectors and areas should take place as soon as possible, but I assure my hon. Friends that the total amount which businesses will be expected to pay in 1990-91 will be essentially the same in real terms as that paid in 1989-90 across the country as a whole.
Nevertheless, I can understand my hon. Friends' concern that business ratepayers in north-east Kent should not suffer excessively as a result of the introduction of the new system, and I hope that I can reassure them on this point. There is no question of the new rateable values of properties in north-east Kent having been based, as they fear, on the rental values of property in other more prosperous parts of the country, or even of the county.
The law requires Inland Revenue revaluation officers to assess the rateable value of a property on the basis of the rent at which that property might reasonably be expected to be let from year to year. The valuation officer must look at the rental value of each property in the condition in which he finds it and, of course, at the location in which it is situated. A general principle does not, therefore, apply to the whole of the Canterbury district. Each property within each town in the district has to be examined by the valuation officer. It certainly does not mean that properties in one area can be assessed on rental values elsewhere. If that were to happen, valuation officers would not be doing their job properly, and ratepayers would have good grounds for appeal.
I shall give my hon. Friends one or two examples, which I hope will help to allay their concerns. As they would expect, prime shop rents in Margate and Ramsgate are between one third and one half of those in Canterbury. I can assure them that that is reflected in the rateable value assessments of the properties concerned. I remind my hon. Friends that there will also be gainers from the new system in north-east Kent. In Ramsgate, for example, the Duraplug factory's rate bill is set to fall from around £34,500 in 1989-90 to just under £24,750 before transition. The Argyle centre's rate bill will fall from around £19,750 in 1989-90 to about £12,354 before transition.
My hon. Friends may be glad to have information about average rateable values in the new lists. In Ashford, the average rateable values in the new lists are £12,814. In Canterbury they are £16,583. In Thanet, they are much less than that—only £9,464. I hope that my hon. Friend's will concede that the differences in rental values are reflected in the new lists.
My hon. Friend the Member for Thanet, North referred to Ashford as the "hot spot" of the south-east. That was also true in 1973, when the previous Channel tunnel scheme was under construction. Ashford starts from a high base, going back to 1973. Since then, the major employer in that town, British Rail Engineering Limited, has closed. Ashford, therefore, has had its problems during that period.
My hon. Friends are also particularly concerned about the plight of business ratepayers who, in their words, "live over the shop"—whether they be guest house proprietors or business people living over their shops in the high street. They will be required to pay both business rates and one or more personal community charges in respect of their occupation of the same property, but that is no different from the position of business ratepayers who do not live on the premises. They, too, will pay both rates and community charge. People living over the shop will have the same entitlement to both community charge transitional relief and protection under the business rates transitional arrangements as anyone else who runs a business and whose place of residence is elsewhere.
The valuation of such properties will reflect only the rental value of the business use. No value will be determined in respect of the part that is used as living accommodation. Phasing arrangements will apply to protect ratepayers from large increases. It is worth emphasising that the base point for calculating the transitional arrangements for the business rate will be only that part of the mixed hereditament on which business rates are paid at the moment. The total bill on a mixed hereditament will not be the base point; it will be lower than that. The new base point will be only that element of the rates that is attributable to business use.
Finally, I intend to deal briefly with the cessation of transitional protection when the occupier of a property changes and with the possibility of extending the transitional period. As for the continuation of protection when there is a change of occupier, I am afraid that I can offer my hon. Friends no prospect of any change that they seek. The purpose of the transitional arrangements is to protect existing occupiers. We want to get the transition over as quickly as possible, consistent with that objective, in order to allow the benefits of the new system to come through. The new occupiers do not need protection as they know what the liabilities are when they take on a property,

and to allow new occupiers of existing property to continue to receive protection would be unfair to occupiers of property constructed after 1 April 1990 who will not be eligible for transition.
I can offer my hon. Friends better news about the extension of the transitional period. My hon. Friend the Member for Thanet, South (Mr. Aitken) referred to Mr. Pearce and his jeweller's shop and what he described as the "double whammy". We have not said that there will be no transitional arrangements beyond 1995.
The Government have powers under the Local Government Finance Act 1988 to introduce a further transitional scheme after 1994-95 to ensure that businesses which have not reached their new rate bills then are not faced with a substantial unphased increase, I understand that businesses would find it reassuring if we were to give a commitment now to use those powers and explain how we would use them. It is difficult to judge at this stage what sort of transitional scheme will be needed after the 1995 revaluation, because it is impossible to predict what will happen to rent levels over the next five years. Many businesses facing large rate increases now will find that market rents for the type of property that they occupy will fall relative to rents for other types of property, and that will come through in the 1995 revaluation. So some of the peaks that we are now experiencing may never be reached. That is why we thought it best to delay a decision on a further transitional period until nearer 1995. We are certainly cognisant of the problems of the double whammy and I hope that that will be some consolation to my hon. Friend's constituents.
My hon. Friend the Member for Thanet, South made some more detailed points about the system of valuation and appeals. I do not have time to deal with them now, but I shall certainly write to him and to my hon. Friend the Member for Thanet, North covering those points and some of the other matters that I have not had time to deal with today.

Question put and agreed to.

Adjourned accordingly at one minute past Three o'clock.